Unlocking Investment Potential in Africa: JICA s approach Joint DAC-IC Session 1.2 OECD Global Forum on International Investment Toru Homma Advisor, Industrial Development Department / Trade & Investment Advisor, Regional Strategy Unit for Africa Japan International Cooperation Agency (JICA) Homma.Toru@jica.go.jp OECD, Paris, 7/12/2009
Contents An Overview of JICA s approach for (1) investment, (2) Africa Contribution to Investment for Development and NEPAD-OECD Initiative Case studies on leveraging ODA to improve investment climate / using the OECD PFI
Birth of New JICA in October 2008 The integration will enable New JICA to be more strategic, effective and responsive in implementing ODA. ODA Bilateral ODA Grant Aid * MOFA Technical Cooperation JICA ODA Loans [US$ million] Total FY2008 9,942 1,016 1,486 FY2009 11,116 1,118 1,596 7,440 8,402 New JICA Multilateral ODA JBIC (ODA) Contribution to International Agencies MOFA *Excluding those to remain under the auspices of MOFA for diplomatic reasons. Synergy & Impact Greater effectiveness, efficiency and impact with 3S (Speed Up, Scale up and Spread Out) 3
JICA s approach to trade and investment promotion Business environment improvement for trade and investment Policy and regulation reform Intellectual property rights, standardisation and accreditation Infrastructure: economic infrastructure (transport and energy), customs system, multi-facility economic zone Capacity development for trade promotion Capacity development of trade promotion agency Strengthening private sector s competitiveness Capacity development on international rules (WTO/FTA/EPA) Capacity development for investment promotion Capacity development of investment promotion agency Investment promotion information service and networking Private sector-led economic growth Response to Monterrey Consensus to achieve MDGs
JICA s approach: assisting private sector to promote investment Business environment improvement PPP infrastructure New Frontier Software: investment/trade policy & regulation reform, customs reform etc. Hardware: supporting infrastructure (port, railway, industrial park etc.) by ODA Industrial human resource development Infrastructure development and management (example - power: planning & distribution by ODA / IPP by Private etc.) ODA funded port/water facility management CSR: community support, BHNs etc. BOP business support: survey, Microfinance Scale up of ODA project by private sector Experience on practical linkages between ODA and private investment in Asia, which led Asian economic growth and poverty reduction --- to be shared in Africa
JICA Network: Offices in Africa Morocco Tunisia Egypt Senegal Niger Burkina Faso Sudan (Khartoum) Sierra Leone Liberia Ghana Côte d Ivoire Total: 30 offices Benin Nigeria Cameroon Gabon DRC Namibia Sudan (Juba) Zambia Botswana Uganda Rwanda Burundi Zimbabwe South Africa Mozambique Djibouti Ethiopia Tanzania Malawi Kenya Madagascar
TICAD IV (May 2008) Internationally agreed principles of cooperation to Africa reflected in the Yokohama Declaration 1. Boosting Economic Growth a. Development of regional infrastructure (transport, power) Expansion of One Stop Border Post (OSBP) b. Enhance capacity to increase food production and agricultural productivity (especially rice) through the promotion of CARD initiative c. Trade, investment and tourism promotion / infrastructure development for PPP, human resource development 2. Ensuring Human Security a. Assistance to achieve MDGs (school construction, infectious disease control, water supply) b. Development assistance that contribute to regional stability and peace consolidation 3. Environment / Climate Change Contribute to Cool Earth Partnership through effective project formulation and implementation
Japan s commitment Doubling total ODA to Africa by 2012 ODA by Modality Average Annual Level Targeted Amount in (2003-2007) 2012 (Cumulative) Grants (Bilateral) USD 0.7 billion USD 1.4 billion ODA loan (Net) USD 80 million Over USD 160 million Disbursement to AfDB USD 120 million USD 240 million Total ODA to Africa USD 0.9 billion USD 1.8 billion Average (2003-2007) Yen Loan (billion USD) 2.0 1.5 1.0 Disbursement to AfDB Yen Loan (Net) Technical Cooperation Grants 2012 Average (2003-2007) T/C & Grants 0.5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
West-Central Africa Regional Infrastructure Assistance case: Japan s Assistance for Energy Sector in Africa GHANA Rural Electrification (V) (On-going) Eastern Africa Human Resources Development Project for Disseminating PV Systems (On-going) UGANDA CAPE VERDE Power Supply, Transmission and Distribution Lines Project in Santiago Island(ACFA)(On-going) *L/A signed 08,Mar Bujagali Interconnection Project(ACFA) (On-going) *L/A signed 07,Oct Construction of Ayago Hydropower Plant Project (Candidate Project) SENEGAL OMVG Power Generation &Transmission(Candidate Project) Rural Electrification Project Phase II (On-going) SIERRA LEONE Project for Urgent Improvement of Electric Power Supply System in Freetown (On-going) NIGERIGA Project for the Rural Electrification in Cross River and Akwa Iborn States (I-III) (On-going) West Africa Power Pool KENYA Sondu-Miriu Hydropower Project II (On-going) *L/A signed 07,Jan Olkaria IV Geothermal Power Plant Construction Project (Candidate Project) Malawi ZAMBIA Southern Africa The Rural Electrification Promotion Project (MAREP Phase IV) (On-going) Increasing Access to Electricity Services Project (Co-financing with WB)(On-going) Electrification Development Master Plan (On-going) Central Africa Power Pool Southern Africa Power Pool Eastern Africa Power Pool TANZANIA Reinforcement for Iringa-Shinyanga 330 kv Transmission Line Project (Co-financing with WB)(Candidate Project) Thermal Power Development Project(Co-financing with WB)(Candidate Project) Project of Reinforcement of Transmission and distribution Facilitation in Oysterbay Station (On-going) Technical Support Project for the Stable Power Supply System (On-going) Loans Grant T/A MOZAMBIQUE *Only on-going/candidate projects are shown in this sheet Mozambique-Malawi Transmission Line Project (Co-financing with WB)(Candidate Project) North-South Backbone Transmission Line Project(Co-financing with WB)(Candidate Project)
Regional Infrastructure (transport) Tunisia AGADIR Morocco Algeria Libya CAIRO Egypt TAH: Trans African Highway OSBP: One Stop Border Post Western Sahara DAKAR Senegal Gambia Guinea Bissau Sierra Leone Mauritania Guinea Liberia : Paved Road : Missing Link : On-going project : On-going project (Japan s Assistance) : Candidate projects (Japan s Assistance) Mali Niger Burkina Faso Benin Nigeria Togo Ghana Cote D Ivoire LAGOS Cameroon TAKORADI Map is edited based on NEPAD STAP and TAH Gabon LUANDA LOBITO NAMIBE WALVIS BAY Chad N DJAMENA Central African R. Rep. Congo D.R. Congo Angola Sudan Burundi Zambia LUSAKA Tanzania Kenya Zimbabwe Namibia BEIRA Botswana Mozambique WINDHOEK JOHANNESBURG South Africa Rwanda Lesotho KHARTOUM Uganda Malawi HARARE Swaziland DURBAN Eritrea Ethiopia Djibouti ADDIS ABABA Somalia MOMBASA DAR ES SARAAM MTWARA NAKARA OSBP (Chirundu) OSBP (Namanga) Madagascar Mauritius 10
JICA s assistance to OSBP projects On-going projects <Technical cooperation> @Malaba, Namanga The Project on Capacity Building for the Customs Administrations of the Eastern African Region - Capacity building for Custom Administration - Staff training <Project Formulation> @Chirundu - Development of Legal Framework - Border Staff training (overview of OSBP) <Construction of Facility> @Mfun - Study, design and construction of OSBP with ODA loan/afdb AGADIR Western Sahara Mauritania Morocco Algeria Tunisia Libya Mali Niger Chad DAKAR Senegal N DJAMENA Guinea Gambia Bissau Burkina Faso Guinea Benin Nigeria Togo Sierra Leone Central Ghana African R. Cote D Ivoire 6 Liberia LAGOS Cameroon TAKORADI Mfun Gabon LUANDA LOBITO NAMIBE WALVIS BAY Construction and Technical support Construction Technical support Cross border Infrastructure assistance -Kanyaru Oshikango Wanela/ Sesheke -Kobero Technical support before TICAD IV -Gatuna/ Katuna Rep. Congo 18 D.R. Congo Angola Namibia WINDHOEK 17 Botswana South Africa CAIRO Egypt KHARTOUM Sudan -Mutukula Uganda 2 Kenya 10 Rwanda 13 11 9 15 1 Burundi 124 7 16 8 Zambia LUSAKA 5 JOHANNESBURG Lesotho 3 Tanzania Malawi Zimbabwe 14 : On-going -: Candidate : Completed HARARE BEIRA Mozambique Swaziland DURBAN Eritrea Ethiopia Djibouti ADDIS ABABA Somalia MOMBASA DAR ES SALAAM MTWARA NACALA -Kazungula Malaba Madagascar Chirundu -Busia -Isebania/ Sirai Namanga -Taveta -Lungalunga/ Horohoro -Rusumo -Nemba -Tunduma/ Nakonde Mauritius 11
Japan s contribution to Investment for Development Initiative and NEPAD-OECD Africa Investment Initiative Contributed to the Taskforce Meetings which developed the PFI as the Co-Chair Proposed the project to strengthen the NEPAD-OECD Africa Investment Initiative at the OECD Ministerial Meeting Supporting the NEPAD-OECD Initiative, together with Belgium, Finland and the Friends of the Initiative donors, as the Vice Chair of the Steering Group TICAD IV supports promoting African efforts in investment policy reform using multilaterally-endorsed instruments such as the OECD PFI and Strengthen economic governance through the NEPAD-OECD Africa Investment Initiative.
JICA s contribution to Investment for Development Initiative and NEPAD-OECD Africa Investment Initiative Promoting usage of the PFI in its implementation of the ODA programmes Assisting the implementation of the NEPAD-OECD Africa Investment Initiative utilising JICA s African country office network Held back-to-back events at the Initiative s 2007 Lusaka and 2005 Entebbe Roundtables Participated in the past roundtables as the speakers (including the latest Johannesburg meeting on energy infrastructure)
Experience and possible usages of PFI in JICA as a bilateral development partner The PFI as a tool for reviewing on current situation surrounding investment support projects assisting related ministry/agency s capacity building benchmarking to evaluate progress of investment support projects identifying policy area to be highly supported etc. Being promoted inside JICA (video conference seminar, mission, thematic issue guideline etc.)
Case 1: Utilising the PFI - Cambodia Investment Promotion Project Project: The Study on Institutional Strengthening of Investment Promotion in Cambodia (2009-2010) Cambodian Investment Board (CIB) of the Council for the Development of Cambodia (CDC) Scope of Work: Current situation review, Comparative study with neighbouring countries, Investors analysis, Comparative advantage identification, Pilot projects, Recommendations, Seminar Agreed to make the maximum use of PFI for overall analysis on investment promotion Positioned PFI as an important analytical tool Held preliminary discussions on PFI with OECD Investment Division in Paris
Case 1: Utilising the PFI - Cambodia Investment Promotion Project Based on the 9 questions in the PFI Chapter 2 and 40 sub-questions set in the PFI User s Toolkit Designed Questionnaire for Directors, Managers and Staff of CIB (Awareness Survey) based on PFI Became very persuasive questionnaires and convincing analysis by using internationallyrecognised PFI Overall review is being prepared through a series of discussions as a part of the capacity building process
Case 2: Zambia Investment Promotion Project - Triangle of Hope South-south (Asia-Africa) cooperation using Malaysian and other Asian experience and expertise on investment promotion, coordinated by Presidential Office Objectives: Improvement of business climate conducive for investment (laws and regulations) and capacity development of the Government (in cooperation with private sector) in investment promotion. (Phase I:2006-2009, Phase II:2009-2012) Promote knowledge-based/service sector, such as Education, Health and ICT as industry in order to reduce disadvantage of landlocked country (high transportation cost). Due to the reform of laws and regulation, the amount of investment into those sectors has been increased. Through OJT on investment promotion, officials have been changing their mind towards client-oriented attitude. Civil Service HOPE Political Will Private Sector
Case 2: Zambia Investment Promotion Project - Triangle of Hope Successes including Africa s almost first mobile phone factory (established March 2009) to which the Project contributed on its joint venture facilitation with Malaysian resources Based on the recommendation by the Zambia-Japan joint evaluation team, Phase 2 considers to utilise the PFI as a benchmarking tool Zambia Investment Seminar was held by the Project in cooperation with the NEPAD-OECD Initiative as its Lusaka Roundtable s back-to-back event (Nov 2007) Active donor coordination
Case 3: PPP Uganda Bujagali Energy Public Private PPP Bujagali Interconnection Project Bujagali Hydropower Project Uganda Electricity Company (Executing Agency) MIGA Guarantee SPC Loans Guarantee IDA Government of Uganda (Borrower) JBIC/AfDB Loan (EPSA/ACFA) Shareholders Financing Private Companies Loan (EPSA/NSL) Commercial Lenders DFIs (IFC, AfDB, etc)
Enhanced Private Sector Assistance for Africa (EPSA) ACFA Accelerated Co-financing Scheme for Africa Annual consultation on Project Finding / Implementation JICA ODA Loans Commission to formulate, supervise etc. Concrete Commitment EPSA Enhanced Private Sector Assistance for Africa AfDB/AfDF Provide Loans and supervise projects Sovereign Guaranteed Projects Commit JICA ODA loans up to 1 billion USD over the next 5 years since 2005 NSL Non-Sovereign Loan JICA AfDB ODA Loans Provide Loans and supervise projects Non-sovereign Private Sector Projects <Focus areas> - Creating an Enabling Business Environment - Strengthening Financial Systems - Building Competitive Infrastructure - Development of Micro-SMEs - Promoting Trade and FDI FAPA Fund for Private Sector Assistance GoJ FAPA (Secretariat within AfDB) Technical Assistance
Lessons and Conclusions Bilateral ODA s significant role to mobilise private investment in support of economic growth : Aid for investment Nexus of infrastructure, investment and development assistance Partnership among the Government, the private sector and the development partners Usefulness of the PFI and the NEPAD-OECD Africa Investment Initiative for donor agencies: effective tools for implementing bilateral ODA and possible collaborations with the OECD
JICA s VISION Inclusive and Dynamic Development Thank you Merci 22