UNCTAD, JBIC TO FOSTER JAPANESE INVESTMENT IN EAST AFRICA

UNCTAD, JBIC TO FOSTER JAPANESE INVESTMENT IN EAST AFRICA

(Reissued as received.)

GENEVA, 9 March (UNCTAD) -- The United Nations Conference on Trade and Development (UNCTAD) and the Japan Bank for International Cooperation (JBIC) have launched a joint African Investment Initiative to encourage greater investment by Japanese companies in Africa with the ultimate aim of encouraging economic growth, it was announced this morning in Geneva.

Under the initiative, three Blue Books on Best Practice in Investment Promotion and Facilitation will be prepared with the three countries of the East African Community:  Kenya, Tanzania and Uganda.  The Blue Books, drafted in consultation with governments and investors, will propose a set of 6 to 10 measures for overcoming impediments and improving the investment climate which the governments could agree to implement within a 12-month period.  The initiative follows Prime Minister Junichiro Koizumi's September 2003 announcement that his Government will promote Japanese private investment in Africa through a number of modalities, including JBIC’s overseas investment loans, with a total target of $300 million over a five-year period.

The objective of this initiative is to encourage poverty reduction through economic growth, which is one of the three pillars of the New Partnership for Africa’s Development (NEPAD).  JBIC is sponsoring several such initiatives.  The initiative announced today complements the focus on Africa at this year's Group of Eight (G-8) Summit.

Japanese investment in Africa has been low, accounting for only 0.6 per cent of Japan's global outward stock.  Investment by other Asian countries in the continent is also low, although the percentage shares are higher and the absolute numbers lower.  In 2002, for example, the global outward foreign direct investment (FDI) stocks of both China and India were just under $10 billion each, of which 5 per cent in China's case and 18 per cent in India's was in Africa.  The reasons are the size of the domestic African market, the availability of more competitive investment destinations closer to home and, in the case of Japan, the lack of a support network and weak linkages between the FDI and official development assistance (ODA).

The profitability of investment in Africa may be competitive in comparison with other regions, and there is a case for putting more emphasis on Africa as a commercially viable destination for foreign investment. 

The UNCTAD has done extensive work on investment-related issues in the East African community.  It published an investment policy review (IPR) of Uganda in 2000 and an investment guide to Uganda in 2001, which was updated last year.  For Tanzania, an IPR was published in 2002 and a guide will appear by mid-2005. Both an IPR and a guide are being finalized on Kenya and will be published by mid-2005.  Other related UNCTAD activities in the region include a good governance project in Tanzania, entrepreneurship and linkage development projects in Uganda, and training in investment promotion in Kenya.

The UNCTAD and JBIC developed Blue Books for Cambodia and Lao People’s Democratic Republic in 2004, the year those countries joined the Association of South-East Asian Nations (ASEAN).  The JBIC is an active member of the UNCTAD-International Centre of Commerce (ICC) Investment Advisory Council, established at the Third United Nations Conference on the Least Developed Countries (Brussels, 2001).

Contacts:  Press Office, tel.:  +41 22 917 5828, e-mail:  unctadpress@unctad.org; http://www.unctad.org/press; V. Govitrikar, tel.:  +41 22 917 5631, e-mail:  vishwas.govitrikar@unctad.org.

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