Renovating Aid in Africa:
New opportunities and challenges
for Japan’s ODAMay 2007
GRIPS Development Forum
National Graduate Institute for Policy Studies (GRIPS)

http://www.grips.ac.jp/forum-e/

1. Africa and Japan’’s ODA PolicyCurrent ODA policy，based on two pillars (ODACharter 2003)




The 2003 ODA Charter newly introduced agenda,relevant to Africa
Asia (“priority” region): ODA as a means to promoteeconomic integration
The rest of the world: ODA to address global causes“Peace building” and “human security”

But, Japan’s vision for aid to Africa remains
tenuous….; Why?

1

Africa and Japan’’s ODA Policy<See handouts>

Historically, “reactive” aid policy to Africa (esp. untilthe 1980s)
 In the 1990s, increased global commitment as top
donor—initiating the TICAD process (1993, 98,2003)
 In the 2000s, mounting difficulties under the ODA
budget cut (-38% cumulatively from the 1997 peak) Despite many challenges, the Year 2008 gives newopportunities for Japan’s aid to Africa.
Africa and Japan’’s ODA Policy 2008: The “Year of Destiny” of Japan’s aid?
 TICAD IV (Tokyo International Conference forAfrican Development): spring Hosting G8 Summit: July New JICA: October
Excellent opportunities to demonstrate Japan’s renewed
commitment to aid and share its development visions-- under a new institutional framework-- domestically and internationally22. Challenges
 Limited knowledge of Africa and its potential

among the Japanese public (—for whom ODA
budget is accountable)
 Why Africa (among many competing priorities)?
 What are prospects for success?, How can
growth be generated and sustained?
 Relevance of Japan’s aid model in theAfrican context? (—although it appears to haveworked in East Asia) Japan’s current aid model is built on its
experiences in East Asia [Ishikawa 2005]

Challenges
Main features of this model include:
1.

Request-based” approach and respect for
country ownership (weak involvement in policy
conditionality)

2.

3.

Dialogue and discussions building on trust overthe long-term
Projects as dominant aid modality (whereinstitutional and policy coherency is provided by recipient
govt.)

4.

Active use of loans to support productive sectors,
esp. through infrastructure development (loans
are repaid as the recipient economy has grown)

3Challenges


Until recently, ODA loans to Africa reduced (relatedto the Enhanced HIPC Initiative)Emergence of “new aid agenda,” urging Japan tochange its aid behavior






Remain concerned about debt sustainability

Governance agenda，involving policy & institutional issues
New aid modalities, alignment & harmonization
Emphasis on social sectors (esp. early PRSPs), etc.

Institutional fragmentation of Japan’s ODA (bothpolicy and implementation)，adding difficulty tocoherent and country-focused approach

3. New Opportunities
 Commitment to increasing aid to Africa despite

fiscal stringency
Doubling ODA to Africa over three years (2005-07):
PM announcement at the G8 Gleneagles Summit in2005

 Growing concern about the quality of aid within

Japan, prompted by ODA budget cut Renewed interest in Africa, partly as reaction toChina’s growing influence in the region

4New Opportunities
 Institutional response to African agenda

MOFA: strengthening country assistanceprogramming; formation of “All Japan” field-basedteam; decision to increase embassies in Africa
 JICA: reorganization & field delegation, increased TA
budget for Africa, peace building & human security
 JBIC: strengthening the support to low-incomecountries, through minimal interest rate initiative(0.01%) and the co-financing with AfDB (2006), etc.
 Progress in ODA reforms, including institutionalchanges (esp. 2006- )Cf. Latest ODA Reforms


Unprecedented reform, in terms of the scope andstructural changes in ODA policy formulation andimplementation<Three-tier structure> Strategizing ODA
 Better policy coordination(within MOFA) Effective & efficient aiddelivery-- Holistic approach; maximizing
synergy of multiple aid menu

Strategy(OECC at Cabinet
Secretariat: April 2006 -)Policy(MOFA in coordination with related
ministries and agencies - Aug. 2006)

Implementation(new JICA: Oct. 2008 -)5

4. A Proposal for Renovating
Japan’’s aid to AfricaCreate a success model(s), focusing on selected
countries (“demonstration effects”)
“Aid for Graduation” – promoting productive sector and“real-sector” concern
Providing comprehensive support, ranging from policy
advice to concrete activities on the groundFlexibly mix bilateral & multilateral resources, andwork with development partners, including Asianpartners
 Reassess which elements of Japan’s aid model arerelevant and which are not in Africa, and focus on itsstrengths
Issues for Discussions
 What do you think of comparativeadvantages of Japan, esp. in developmentand aid?
 What are the issues to be improved by Japan(policies, practices, etc.)?
 How about the role of Asian partners in
Africa’s development?
 Any suggestions for TICAD IV and G8 in2008?
We appreciate your views… !!!

6

Handouts

Evolution of Japan’s Aid to Africa: Five Phases
PhasesJapan’s Aid Policy
Aid Policy to Africa
1st Phase:・ Pursuit of short-term economic ・ Concentration of aid in Asia
1954 (participation in theinterests
・ Absence of aid policy toColombo Plan) - 1972
・ EstablishmentofAfrica“request-based” approach
2nd Phase:・ Expansion of aid linked to ・ Growing interest in Africa to1973 (1st oil shock) -1980
economic security
secure natural resources andincreased aid to Africa
・ Aid policy to Africa linked tobuild support for Japan’s rolein UN
3rd Phase:・ Using aid as a means to ・ Increased aid to Africa and1981 (5-year Doubling
recycle Japan’s economic
co-financing of SAL
Plan of ODA) - 1988
surplus and increase its global ・ Supporting hunger relief andcontribution
food security
4th Phase:・ Becoming top donor and using ・ Becoming a major donor in1989 (top donor) - 2000
aid for broad policy initiatives
Africaas part of global contribution
・ Engagement in politicalsphere,including
thedispatch of SDF
・ Hosting TICAD
I and II(1993, 1998) and exploring
new aid initiative in Africa
5th Phase:・ ODA budget cut and policy ・ Debt forgiveness to HIPCs
2001 (US replacing Japanchanges
・ Linking aid to peace buildingas top donor) - Present・ Development partnerships
・ Supporting NEPAD/AU・ TICAD III organized (2003),and TICAD IV planned for2008
Source: Makoto Sato (2004) “Japan’s Aid Diplomacy on Africa” in The Study on the African
Economy, eds. Katsuhiko Kitagawa and Motoki Takahashi, Minerva Shobo, Table 11-1 (p.245)

Trends in Japan’s Bilateral ODA by Region-4.0

1970

98.2

3.6

70.5

1980
59.3

1990

10.2

10.4

11.4

11.4

8.1

2.2 0.0

7.1
2.3

2000

54.8

7.5

10.1

8.3

1.6 1.2

16.5

2001

56.6

3.9

11.4

9.9

1.4 1.6

15.3

8.8

1.4 1.8

15.5

60.7

2002

3.1

53.6

2003

6.9

42.7

2004
-10%

0%
Asia

17.3

10%

20%

30%

40%

Middle EastAfrica

Latin America

50%

8.7
8.8

7.7 0.9

10.9

5.2 0.7 2.4

20.8

80%

90%

60%

Oceania

Europe

70%

1.2
0.6

6.0
1.6

0.3

18.5

3.6

100%

Others

Source: Ministry of Foreign Affairs, Japan’s ODA White Paper (2005)

Trends of Net ODA from G7 Countries 1985-2006(net disbursement base, US$ million)
30,000in millions of US dollars
CanadaItaly
United States

25,000FranceJapan

Germany
United Kingdom

20,00015,000Japanrd(3 : 2006)

10,0005,000

Year
Source: OECD/DAC (Development Co-operation Report 2006, CRS online database)

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

1984

1983

1982

1981

1980

1979

0