Private Sector Development in Africa
April 13, 2010, Tokyo
Go Shimada, Director
Private Sector Development Division
Industrial Development Department, JICA
Shimada.Go@jica.go.jp

1© Shinichi Kuno and Kenshiro Imamura

Agenda１．Private Sector Development and JICA, in context of AfD (Aidfor Development)
2. Key Messages of the JICA Report on the Economic
Development in Africa and the Asian Growth Experience
3. Case study 1： Industrial Policy support to Ethiopia
4. Case study 2： Zambia ToH (Triangle of Hope) ProjectBirth of New JICA on October 1, 2008
Consolidation of ODA implementation tools for the new JICA
1. The new JICA integrates JBIC’s operations covering Japanese ODA loans and overseas
investment, and part of MOFA’s grants
2. The new JICA provides more strategic and effective ODA as a single agency centrally
managing technical cooperation, loans and grant aid
FY2008Grant aid*
MOFA
Bilateral AssistanceTechnical cooperation
JICA

ＯＤＡ

US$1,016 million

US$1,486 million

Thenew JICAODA loans
JBIC(ODA)
Multilateral Assistance

US$7,440 million

FY2009Multilateral Assistance* Except for certain items retained by MOFA required for policy
commitments

New JICA: US$11,116 million- GA: US$1,118 million- T/C: US$ 1,596 million- ODA loans: US$ 8,402 million

FY2008:JPY 103.5/USD (DAC rate)
FY2009:JPY 97.60/USD (IFS rate for April 31, 2009)

New JICA’s Message
 Integrated operations of 3 aid modalities One of the world’s largest aid agencies

Birth ofNew JICA

 One stop shop for Japan’s ODA
 Establishing the JICA InstituteVisionInclusive and Dynamic Development
Mission① Addressing Global Agenda③ Improving Governance

Addressing the global agenda, including climate change,water, food, energy, infectious diseases and financing

Strengthening policies, institutions, organizations,human resources as underpinnings of development

Pursuing sustained poverty reduction through inclusive andequitable growthProtecting people from threats and building societies
where they can live with dignity② Reducing Poverty through Equitable Growth ④ Achieving Human Security

Strategy Integrated Assistance Promoting Development Partnerships

 Seamless Assistance Enhancing Research and Knowledge Sharing● Combining policy support, institution building, human capacity
development, infrastructure development, etc.
● Cross-border and cross-sector assistance● Speedy and continuous aid delivery from emergency relief torehabilitation/reconstruction and to peace-building● Meeting flexibly development needs according to a specificdevelopment stage from least developed countries to middle income countries● Promoting public-private partnership● Applying technologies and knowhow● Strengthening partnerships in the international aid community● Enhancing research function on development by drawing on its
abundant field experience● Sharing research findings and leading discussions on
international development assistance Achieving synergy of merger （Speed-up, Scale-up,
 Fostering expertise for providingSpread-out））
professional solutions
 Tackling complex and difficult issues flexibly with the  Efficient and transparent operation
field-based approach

AfT accounts for over a half of total loans.
Total Loans and Loans for AFT （2004-2008, USD million)

Exchange rate (DAC rate)
2004: JPY108.1/USD, 2005: JPY110.1/USD, 2006:JPY111.6/USD, 2007:JPY117.8/USD, 2008: JPY103.5/USD

Asia and Africa are the main regions for JICA’s AfT
JICA’s Aid for Trade by Region （2007）
.

Loans

Technical Cooperation and Grant Aid
Oceania1%

Middle East
4%

Europe2%

Oceania4%

Africa14%

World1%

America
16%
Asia
46%

Middle East
8%
Africa
23%

Asia
81%

Asia

AfricaMiddle East

America

Oceania

EuropeWorldJICA aims to improve aid effectiveness through synergy between
loans, and technical cooperation and grant aid
JICA’s Aid for Trade by Sector （2007）
Loans

Technical Cooperation and Grant Aid

Industry
2%

Mineral Resources and Mining
2%
Industry
9%

Forestry
10%
Agriculture
10%

Trade Policy and Regulations
2%

Tourism
2%

Transport and Storage
16%

Fishing
5%

Transport andStorage
32%

Communications
8%

Forestry
7%

Business Support
Sevices andInstitutions
3%

Energy Generationand Supply
41%

Banking and Financial Services
2%

Communications
2%

68%

75%

Energy Generation and Supply
6%

Agriculture
34%

Business Support Services andInstitutions
7%

Economic Infrastructure Building Productive Capacity
Transport and Storage

Communications

Energy Generation and Supply

Banking and Financial Services
Forestry
Mineral Resources and Mining

Business Support Services and Institutions
Fishing
Tourism

Agriculture
Industry
Trade Policy and Regulations

Major Economic Infrastructure and JICA Projects
North-South Economic Corridor▲Loans ●Grant Aid ★Technical Cooperation▲●Nam
Ngum Hydropower Station▲●Kunming

8▲Nam Leuk Hydroelectric Power Plant

MekongRiverEast-West Economic Corridor▲Yangon International Airport

Myanmar▲Pha Lai Thermal Power Plant

Hanoi

Lao PDR▲Cai Lan PortHai Phong

Naypyidaw Chiang Rai▲●Baluchaung
Hydro Power Plant▲●●Vientiane International Airport

Vietnam▲Hai Phong Port

Vientiane
Nong Khai
Yangon★Yangon Port

Mawlamyine▲Second Mekong International Bridge

Thailand

Savannakhet
MukdahanHue

Phitsanulok

Pakse▲Lam Ta Khong Pumped Storage Power Plant

BangkokSisophon Siem Reap

CambodiaTrat●National Road Route 9Da Nang

Development
Triangle

Kampong Cham

▲Hai Van Tunnel▲Da Nang Port
●Pakse Bridge

Phnom Penh
Ho Chi Minh

▲Suvarnabhumi International Airport

Vung Tau●Bridge over the Mekong River●National Road Route 6 and 7

Southern Economic Corridor▲Phu My Thermal Power Plant▲★Cai
Mep-Thi Vai Port▲★
▲Leam Chabang Port▲Tan Son Nhat International Airport▲Map Ta Phut Port▲★SihanoukvillePort▲★

●National Road No.1

9People arriving at Savannakhet from Thailand. The
bridge changed the movement of goods and people

One stop service is provided at the custom
office of Laos Boarder

Second MekongInternational Bridge

GRDP per capitain GMS Countries and Regions

Time Distance Between GMS Countries(A) A Few Years AgoChina

China

MyanmarLao PDR

Lao PDR

MyanmarVietnamThailandThailand
Vietnam

Cambodia

Cambodia
0GRDP(USD/person)
1,500 1,200 - 1,500
900 - 1,200
800 900
500 700
400 500
300 400
200 300
100 200
0 100

40(B) After CBTI/CBTA
Completion

Source: Univ. of Tokyo80 (h)

Regional Infrastructure (transport)
Tunisia
TAH: Trans African Highway
OSBP: One Stop Border Post

MoroccoAGADIR

CAIRO
Egypt

Libya

Algeria

Western
Sahara
Mauritania
Mali
DAKAR
SenegalKHARTOUMChadN’DJAMENA

EritreaSudan
Djibouti

GambiaGuineaBissau

Niger

GuineaSierra Leone
Liberia

Burkina Faso
Benin Nigeria
Togo
Ghana
Cote
LAGOS
D’Ivoire
Cameroon
TAKORADIADDIS ABABA
CentralAfrican R.

Somalia
UgandaRep.
Gabon Congo: Paved Road
: Missing Link
: OnOn-going project: OnOn-going project(Japan’(Japan’s Assistance): Candidate projects(Japan’(Japan’s Assistance）Assistance）

Ethiopia

D.R.
Congo

Kenya

RwandaBurundi

MOMBASA●OSBP (Namanga)

Tanzania
LUANDADAR ES SARAAM
MTWARA

LOBITO
AngolaNAMIBE

ZambiaLUSAKA

Malawi
NAKARA
HARARE

Zimbabwe
BEIRA

Namibia
Botswana

WALVIS BAY
WINDHOEK

Mozambique

Mauritius
Madagascar

Swaziland

JOHANNESBURG

Lesotho
DURBANSouth Africa

Map is edited based on NEPAD STAP and TAH●OSBP (Chirundu)

Present Status of OSBP Projects●:On-going■:Past assistance- :Candidate

Tunisia◇ On-going projects ◇MoroccoAGADIR<Construction of facilities>
Chirundu
Namanga
Mfun
Rusumo<Facilitation of Legal
Procedures>

CAIRO

Libya

Algeria

Egypt

Western
Sahara●Malaba

Mauritania-BusiaMali
DAKAR
GuineaBissau

Chad

Niger

N’DJAMENA

SenegalGambiaEritrea

KHARTOUM
Sudan-Isebania/
Sirai

Djibouti

Burkina Faso
GuineaNigeria
Benin
Togo
Sierra Leone
Ghana
Cote D’Ivoire
Liberia
LAGOS
Cameroon
TAKORADI

6●Mfun2 Kenya-Gatuna/
Katuna10913 11
Rwanda15 412Burundi
16D.R.
Congo

1714-Kanyaru
LOBITO-Lungalunga/
MOMBASA Horohoro
DAR ES SALAAM

LUANDA

ZambiaLUSAKA■Oshikango

318175-Rusumo-NembaMTWARA

MalawiAngola-Taveta8

Tanzania

NAMIBE●Namanga

Somalia-KoberoChirundu
RusumoEthiopia

Uganda

Rep.
Congo

Gabon

ADDIS ABABA-Mutukula
CentralAfrican R.

NACALA-Tunduma/
NakondeHARARE

Zimbabwe<Capacity Building>- Custom administration in EAC- Training for border officials atChirundu■Wanela/Sesheke

BEIRA

Namibia
Botswana

WALVIS BAY
WINDHOEK

Mauritius

Mozambique

Madagascar

Swaziland

JOHANNESBURG

Construction and Technical support
Construction
Technical support
Technical support before TICAD IV

Lesotho

DURBAN●Chirundu

South Africa-Kazungula

Regional Infrastructure (power)

Power Pool:
There are currently 4 power
pools in Sub-Sahara Africa
and the trade of power is freewithin regions.

West Africa Power
PoolCentral Africa Power
Pool

Southern Africa Power
Pool：Loans：Grant：T/A

East Africa Power
PoolKey Messages of the JICA Report on the Economic
Development in Africa and the Asian Growth Experience (1) “Industrialization Strategy” as a process – NOT apiece of document
 A trial and error process: be aware, some may
end up in flops, but it has be embraced as part of thegame
 Support measures adopted in accordance withinstitutional capacity – one may as well begin
with neutral – cross sectoral – measures
 Most support measures are permissible for LDCs,
even under today’s international rulesKey Messages of the JICA Report on the Economic Developmentin Africa and the Asian Growth Experience （２） Africa needs to sustain and accelerate growth throughexport-oriented industrialization
 Governments in Africa ought to have more policy

space to discover and help develop growth-leadingindustries through trial-and-error process A call for establishing “IndustrializationStrategy” process in Africa

Some unique features of the Asian experience Diversity in terms of development strategy, role ofthe state and growth-leading industries – consequenceof the country’s effort of strategic responses to thechanging conditions
 Existence of public-private partnership foraddressing private sector constraints, developing
future strategy and facilitating coordination
 Long-term (transformational) perspective indevelopment strategy, which formed economic andsocial basis of development and guided private sector
investment

Diversified Paths of Development in Asia Diversity across Countries− Domestic Capital-Dependent vs. Foreign Capital-Dependent− Natural Resource-Rich vs. Natural Resource-Poor− Interventionism vs. Liberalism Diversity over Time− IS → EO → (IS ⇔ EO) → Globalization
 Diversity in growth-leading Industries− Heavy industry, consumer electronics, textiles, agro-processing,human resources, ICT …

 A self-owned process of strategic responses to thechanging environment and challenges/opportunities

“Asian Dynamism”
 Geographic diffusion of industrialization –growth: a regional phenomenon
 Within each country, industrialization
proceeds from low-tech to high-tech Also known as the Flying Geese Pattern Clear order and structure (with a possibilityof re-formation)

Structural Transformation in East Asia
3Country2Latestcomers

Latecomers

ASEAN4

NIEs1

Japan
Garment

Steel

Popular TVVideoDigitalCamera
TimePopularTV
SteelVideo HDTV

CompetitivenessGarment

Japan

2

Garment

NIEs
Japan

Latecomers
ASEAN4Time
Competitiveness

Competitiveness

13

Time

International Division of Labor

Garment

Popular
SteelVideo HDTV
TV

Latest comers

Latestcomers

ASEAN4

Latecomers

Japan
NIEs

Transition of Development Strategies in Asia

Long-term (transformational) Perspective in
Development Strategy
Through tripartite dialogue b/w public-privateacademics,
 Identify the long-term vision of the country’s economic
development
 Discover growth-leading industries based on existing
and latent potentials
 Identify the constraints surrounding the growthleading industries
 Devise measures to remove the constraints and as wellas make necessary investments (infrastructure, HRDetc.) to support the industries

Key principles of “Industrialization Strategy”

 Industries mean more than manufacturing –includes services sector and agriculture Clear and objective criteria to discover the industries
and maintain transparency in the process
 Establish a “process” of P-P dialogue
 Support with discipline (punishment and exitstrategy) and apply rule of competition
 Proceed as institutional capacity develops

Role of the international community
 Embrace diversity of development strategies inAfrica and support countries with strong
commitment to advance own strategy
 Sustain efforts to maintain/enhance market accessof African products Invest in large-scale infrastructure with regional
impact Support technological capacity building in Africa

Action by GoJ/JICA to advance IS in Africa
 Support to the dialogue-based formulation of“Industrialization Strategy”, incorporating Asianexperience, in some selected African countries
 commitment by GoJ expressed in TICAD IV Action Plan The process needs to be harmonized with otherprocesses – investment in infrastructure and otherbusiness operations
 Donor coordination needs to be heeded – including“Growth Diagnostics” – to promote mutual learning andcomplementarity between the two processes

Case Study 1: Industrial Policy Support to Ethiopia

TICAD IV(May 2008)

G8 Hokkaido
Toyako Summit(Jul. 2008)

The Initiative for
Policy Dialogue (IPD)：African Taskforce
Meeting in Addis
Ababa (Jul. 2008)

Symposium: Economic Developmentin Africa and the Asian
Growth Experience(May 2008)

Follow up Japan’s enhanced support to Africa

Industrial development support frameworkin Ethiopia
Request from Prime Minister Meles （July, 2008）
Support to formulate development
policyExchange of views on industrial
development strategy, andrecommendations by the Japaneseside based on Asian development
experience.

Support to nurture privatecompanies
Technical cooperation of JICA for
enhancing competitiveness ofprivate companies on the basis ofJICA’s experience in Tunisia.

The project of policy dialogue
on industrial development

The project on quality andproductivity improvement(KAIZEN)

The project of policy dialogue on Industrial
Development
2009

2010

2011

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Policy Dialogue
Schedule of HLF
1) Policy vision
with Prime Minister’s Office2) PASDEP

Review on Policies &Strategies

Review on PASDEP

with MoFED & MoTI

3) Sectors
with MoTI

4) Project and Action
with MoTI

Kaizen Project1) Quality &Productivity
Improvement by Kaizen

Review on MoTI's
Implementation

Sharing of Japan'sExperience

Preparation

Sector Study(phase 1)

1stReportDepth Review & Recommendation
on MoTI's Implementation in
Selected Sub-Sectors

2ndReportProgress and Findings of Study Project

Pilot Projects(phase 2)

Disemination(phase 3)

The project on quality and productivity
improvement （KAIZEN）） （1））
What is KAIZEN?
KAIZEN, in Japanese management, means “continuousimprovement” of productivity and quality without
additional cost, in a participatory process and a bottom-up
approach.
This management practice method has spread among
Japanese companies in Japan and abroad. JICA has alsooffered assistance for KAIZEN to many developing
countries in Asia and Latin America in particular.

The project on quality and productivity
improvement （KAIZEN）） （2））
Profile of the project
1. Objective: To formulate a national plan for enhancing activitieson quality and productivity improvement for
Ethiopian enterprises in industrial sector
 To formulate a manual for explaining and guiding thequality and productivity improvement activities
 To transfer relevant skills and techniques to the staff
members of the Kaizen Unit, Ministry of Trade andIndustry
2. Period:
2 years (August 2009～April 2011)
3. Implementing Institutions:- Ministry of Trade and Industry (MoTI)- Japan International Cooperation Agency (JICA)

The project on quality and productivity
improvement （KAIZEN）） （3））
Major activities -1• Situation analysis on quality and productivity
improvement activities of Ethiopian industry• Visit to the factories in industrial sector for preliminary
diagnosis
Phase• Preparation for the pilot project1
a. selection of methodology for quality and productivity
improvement
b. set the criteria and selection process for the pilot
companies
c. selection of 30 pilot companies

The project on quality and productivity
improvement （KAIZEN）） （4））
Major activities - 2• Implementation of the pilot projecta. to visit the pilot companies to diagnose the situation,and to give guidance on the quality and productivity
improvement activity (KAIZEN) with the staffPhase
members of the Kaizen Unit, MoTI
2
b. to repeat factory visit periodically and give KAIZEN
advice and to monitor the KAIZEN process
c. to evaluate the pilot project and compile
recommendations to the factories
Phase • Formulation of a National Plan including an Action Planof KAIZEN
3• Formulation of a ManualSpreading out the KAIZEN movement fromEthiopia to other African countries

Case Study 2: Investment climate development inZambia (Triangle of Hope Project)
Calling for coordination and sharing of vision among threepartners of development – political leaders, private sector
and civil service− Capitalizing on Asian (Malaysian) expertise and experience, acase of South-South cooperation supported by JICA
− Selected 12 priority sectors based on country’s existing andlatent potentials and prepared T/I promotion package– even“landlocked-ness” is conceived to be an advantage, as being a
potential for developing Air-Cargo Hub & Inland Port within
the sub-region− Business promotion is being advanced with Malaysia andIndia. Some agreements for joint ventures have already beenconcluded for establishing mobile-phone factory, telecom.
college and specialized hospital …
−

Concluding remarks
 “Industrialization Strategy” as a process – NOTa piece of document
 A trial and error process: be aware, somemay end up in flops, but it has be embraced aspart of the game Support measures adopted in accordance withinstitutional capacity – one may as well begin
with neutral – cross sectoral – measures
 Most support measures are permissible forLDCs, even under today’s international rules

Thank you for your attention