On March 30, the Japan International Cooperation Agency (JICA) signed a loan agreement with the African Export-Import Bank (Afrexim) for an overseas investment loan of up to US$200 million to finance a loan for the response to a new type of coronavirus infection (COVID-19) in Africa. The loan will be cofinanced with Sumitomo Mitsui Banking Corporation (SMBC) and Mitsubishi UFJ Bank (MUFG) (Note 1).
COVID-19 has also had a profound impact on Africa, as it has constrained socioeconomic activities, resulting in GDP growth rates of -1.7% (IMF) for Sub-Saharan Africa as a whole and -1.1% (African Development Bank) for North Africa as a whole in 2020, among the worst on record. (IMF) and -1.1% (African Development Bank) for North Africa as a whole, the worst levels in history. The provision of healthcare services, including COVID-19 vaccination, is essential for the smooth recovery of future socioeconomic activities. On the other hand, the fragility of Africa’s healthcare system, such as shortages of medicines and medical equipment, and lack of infrastructure such as hospitals, has once again been exposed, making it important to strengthen the healthcare system (Note 2).
Afrexim, a regional development finance institution with membership from 51 African governments, has been helping to mitigate the impact of COVID-19 in Africa since its inception, and this loan will be used to increase local production capacity for vaccines and medical products. This is in part to help African countries overcome COVID-19 and reduce their dependence on non-African products and international supply chains.
This loan by JICA will be used to establish a regional manufacturing and supply base for medical products and medicines, including vaccine production lines, and to develop hospitals and other healthcare-related facilities by private companies in Africa through Afrexim, while mobilizing funds from Japanese private financial institutions. This is expected to lead to the strengthening of health and medical systems in Africa and to a smoother recovery of socioeconomic activities after COVID-19, thereby contributing to SDGs (Sustainable Development Goals) Goal 3 (Health and Welfare for All), 9 (Build a Foundation for Industry and Technological Innovation), and 17 (Achieve the Goals through Partnership). (Let’s achieve the goals through partnerships).
Note 1 The loan will be implemented based on the Sustainable Finance Framework in the co-financing between SMBC and JICA introduced on March 30, 2021, and SMBC’s funds will also be used for the recovery of socio-economic activities from COVID-19 in the African region.
Note 2: With regard to vaccines in particular, 99% of all vaccines used within Africa (including COVID-19 and influenza vaccines) are dependent on imports.
© Source JICA