June 25, 2019
On May 28, 2019, the African Development Bank (AfDB) and Japan External Trade Organization (JETRO) co-hosted the Pre-TICAD7 Knowledge Event "African Economic Outlook & Debt Sustainability" as an associated event of Think20 at the JETRO headquarters in Tokyo. Representing JICA, Chief Economist Ryosuke Nakata attended.
Think20 (T20) is an engagement group of the G20. It is an idea bank comprising the policy research network in G20 countries to provide policy recommendations to the G20. The T20 Summit was held on May 26–27, in advance of the G20 (Osaka) Summit on June 28–29, 2019.
The economic growth of African countries has been decelerating in recent years mainly due to lower primary commodity prices, but it is still relatively high compared with the average of developing countries, except fast-growing economies like China and India. However, some of the countries have increased borrowing extensively from new sources, including non-traditional donors and commercial lenders, which causes a growing concern on the fiscal and debt sustainability of these countries.
In light of this, a panel discussion was held featuring Kapil Kapoor, director general of Southern Africa Regional Development and Business Delivery Office at AfDB, who visited Japan for attending the T20 Summit, and Katsumi Hirano, executive vice president of JETRO, and Nakata. The panel discussion reviewed a wide range of topics, including the macro-economic outlook of the African region, Japanese private investment in Africa, and an assessment of the debt situation in Africa.
The event opened with greetings from Tadashi Yokoyama, head of the Asia External Representation Office at the African Development Bank, Ahmed Araita Ali, ambassador of Djibouti to Japan and acting dean of the African Diplomatic Corps, and Masahiko Kiya, TICAD ambassador and deputy director-general/deputy assistant minister of Foreign Affairs. This was followed by a keynote speech by Kapoor regarding the recent development and outlook of the African economy, as well as future risks and policy measures against these risks, based on the African Economic Outlook, a flagship publication of the African Development Bank.
Nakata then took the stage and reviewed the changes in debt level and economic growth for individual countries in Africa, Asia and Latin America, analyzing the different impact rising debt levels have on economic growth in each region. Hirano of JETRO talked about trends in non-traditional donors, particularly China, and their impact on debt sustainability from both optimistic and pessimistic perspectives.
In response to these opening discussions, an animated discussion ensued with the audience, including African ambassadors to Japan, members of academic communities, and African researchers participating in the T20 Summit. The discussion covered a variety of topics, including business prospects for Japanese private companies in Africa, the latest policy reform trends in African countries and their differences from the past policies, and the policy measures against risks from easy access to commercial borrowing, and more.
The JICA Research Institute is continuing the dialogue on policies for attaining macroeconomic stability and growth in Africa, based on the policy recommendations at the T20 Summit and the results of this event, in anticipation of TICAD7 (August 28 to 30, 2019).