Japan vows to double Africa aid, investment

By Yoko Nishikawa

YOKOHAMA, Japan (Reuters) - Japan unveiled a package of steps to help boost growth in Africa on Wednesday, vowing to double its aid and business investment, as it seeks closer ties with the resource-rich continent.

In an opening speech for the Tokyo International Conference on African Development (TICAD), to which Japan has attracted more than 40 African leaders, Prime Minister Yasuo Fukuda also said Japan would set up a new $2.5 billion facility to help Japanese firms to invest more in Africa.

"If I were to liken the history of African development to a volume of literature, then what we are about to do now is to open to a new page, titled the 'century of African growth'," Fukuda said, adding that developing transportation infrastructure was key to boost growth there.

The three-day conference in Yokohama, near Tokyo, is a litmus test for Japan's efforts to help Africa as it seeks more mineral resources from the continent.

Japan also hopes to win support for its long-standing bid for a permanent seat on U.N. Security Council -- a topic which Fukuda repeatedly mentioned in bilateral meetings with African leaders on Tuesday.

Some 2,500 participants, representing 52 African nations, delegates from international agencies, and activists such as Irish rock star Bono, have gathered at TICAD as Africa faces new challenges of soaring food and energy prices, which have led to riots in some countries.

Besides talking about how to boost growth in Africa, delegates also stressed the need to meet the U.N. Millennium Development Goals, a set of eight globally agreed targets to be reached by 2015.

As this year markets the halfway point to achieve the goals, which include halving the number of people living in poverty on less than $1 a day and providing universal primary education, concerns are growing that most countries may fail to meet them.

LEADERS' SUMMIT

For Africa, closer ties with Japan means not only getting more aid and investment from the world's second-largest economy but also getting its voice heard on the international stage, especially since Japan chairs the Group of Eight meetings of rich nations this year, including a leaders' summit in July.

"What Prime Minister Fukuda decides this week will set the tone for this summer's G8 Summit where we expect action on promises to Africa -- not more rhetoric or fancy accounting," said Takumo Yamada, spokesman for Oxfam Japan.

Fukuda vowed to double Tokyo's development aid to Africa over the next five years. He pledged to provide up to $4 billion of yen loans to Africa over the next five years to improve African infrastructure, while doubling grant aid and technical assistance over the next five years as well.

"Besides the increase in aid, which is highly appreciated, TICAD needs to go further," said Tanzanian President Jakaya Kikwete. "What remains to be seen is increased trade and investment between Africa and Japan."

Citing World Bank figures, Kikwete said Japanese investment in Sub-Saharan Africa between 2002 and 2004 amounted to $415 million, just 0.4 percent of Japan's global foreign investment.

It is the fourth TICAD conference in the past 20 years, yet Japan has lagged behind rivals China and India in accessing Africa's rich bounty of metals and oil. Japan's trade with Africa is a meager 2 percent of overall trade.