The Japan International Cooperation Agency (JICA) on March 30 signed a loan agreement of up to $200 million with the African Export-Import Bank (Afreximbank) to support COVID-19 responses through investment and financing from the private sector.
The loan will be co-financed with Sumitomo Mitsui Banking Corporation (SMBC) and Mitsubishi UFJ Financial Group (MUFG).
The COVID-19 pandemic has significantly affected the entire African continent. Social and economic activities have been hampered due to the pandemic, which in 2020 resulted in its worst ever GDP growth rate, recording -1.7% in sub-Saharan Africa and -1.1% in North Africa, according to the International Monetary Fund.
In order to recover smoothly from the pandemic, the provision of medical and health services, including vaccination against COVID-19, is essential. Furthermore, the COVID-19 pandemic has revealed that Africa lacks medical and pharmaceutical products as well as infrastructure such as hospitals, and the continent’s healthcare system is quite fragile. Thus, strengthening its health system is essential.
Afreximbank is a multilateral financial development institution with 51 member states in Africa. It has been helping Africa mitigate the impact of the coronavirus since it emerged.
Afreximbank will deploy the loan to advance the development of local production capacities for vaccines and medical products, with the overriding ambition of promoting the self-reliance of African countries in their response to the pandemic and reducing their dependence on non-African products and international sourcing. Chains.
The JICA loan will be used to manufacture medical and pharmaceutical products, including vaccine manufacturing lines, the development of supply bases for these products, and the development of medical and health facilities such as hospitals, through Afreximbank. .
It will also mobilize capital from Japanese commercial banks on the mainland. This will lead to the creation of a stronger health system as well as a smoother recovery of social and economic activities after COVID-19.
It is also aligned with Sustainable Development Goal 3: Good health and well-being, Goal 9: Industry, innovation and infrastructure, and Goal 17: Partnerships for the goals.
The SMBC-JICA Sustainable Finance Framework, which was launched on March 30, 2021, will also be applied to this loan agreement.
Africa is highly dependent on imported vaccines, with 99% of vaccine doses on the continent – whether for COVID-19 or otherwise – being imported.