/DEVELOPMENT BULLETIN 3/ AFRICA-JAPAN: Africa Can Expect a Bigger Slice of Japanese Aid Pie

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Apr 6 1996 (IPS) - The African continent should not expect assistance from Japan as far as debt alleviation is concerned, but the world’s single largest aid donor does plan to channel more development assistance to Africa in the coming decade.

Over the past three years, grant aid and loans to the African continent have steadily increased but is still well below what Tokyo annually disburses to South-east Asia, the biggest recipient of Japanese aid.

The Japanese government often showcases its Official Development Assistance (ODA) programme to South-east Asia, claiming that its aid is a contributing factor to the region’s fast economic development.

Currently Asia receives more than 50 per cent of Japan’s grant aid while less than 30 per cent is extended to African nations. Grants are extended on a bilateral basis and through multi-lateral aid agencies like the International Development Association (IDA).

Japan’s grants, assistance that does not stipulate repayment, represent about 49 per cent of its total ODA budget of 13.24 billion dollars and is directed mainly toward the least developed countries.

Foreign Ministry releases indicate grants, excluding technical cooperation, have grown steadily in recent years. The 1995 budget was around 250 billion yen (2.5 billion dollars) — up 5.2 per cent on the previous year and officials predict a similar growth curve when the new budget is announced later this month.

And, says an official in charge of Africa in the ODA economic cooperation section in the foreign ministry, grants to the continent will increase from the current 27.8 per cent to more than 30 per cent in the next few years. He did not which countries would be targeted.

Grant aid to Africa in 1994 was 702 million dollars — up from 575 million in 1993. In 1994, total aid to Africa, including loans, was 1,143 billion dollars — the most going to South Africa.

Ichiro Inukai, an expert on Africa at the University of International Development in Japan, expects that in time, Africa may actually take over the top spot as a region receiving aid from Japan.

But, he cautions, this will only come if African governments show themselves to be responsible. He explained that Tokyo would also view economic development as justification for channeling more aid to the African continent.

As such, Japanese assistance to Africa has gradually shifted from emergency aid and for the construction of hospitals and schools, toward industry-related initiatives.

“Japanese aid needs to meet the development challenges in recipient countries better. We are setting-up new policies to meet these needs,” said the foreign ministry aid official.

He explained that Japanese aid is also moving away from the old principles that were based on a donor-recipient government relationship.

Yen loans, for instance, which form the bulk of Japanese overseas assistance, will now also be diverted to support private- sector investment for infrastructure projects in developing countries, especially Asia.

A foreign ministry release in January pointed out that such policies will help developing countries come up with money to improve roads, ports, power generators that needed to sustain the regions fast developing economies.

The World Bank estimated recently that the East Asian region will need as much as 1.5 trillion dollars for infrastructural development in the 1995-2004 period.

Officials argue that boosting infrastructural development encourages private investment which in turn expands employment and uplifts the living standards.

Japanese officials also say that Japan’s resistance to reducing the debt burden in developing countries is another way of encouraging recipients to be more responsible.

And as far as Africa is concerned, the same rules will apply. “We are approving grants for the purchase of commodities under a scheme called ‘shopping lists’,” said the foreign ministry official.

Under this project, developing countries can apply for Japanese grants to purchase such things as machinery for factories or products for infrastructure. “The only items not allowed under this scheme are food, military equipment and luxury items,” explained the official.

Prof. Inukai says this initiative is aimed at restricting wasteful spending by governments of least developed countries.

“My research in Africa has shown that grants which were supposed to help finance human needs projects were used by some countries with budget deficits to pay off bureaucrats. This type of waste can be curtailed with definite commodity projects being negotiated,” he said.