On February 2-3, 2023, the second Dakar Financing Summit (DFS) was convened by President Macky Sall of the Republic of Senegal (President of the African Union) to mobilize funds for the African Infrastructure Development Program (PIDA). DFS was held in Dakar, Senegal.
Traditionally, infrastructure development in Africa has followed a path whereby oil, coal, minerals, and other resources in the region are exported as raw materials to other parts of the region, and products processed outside the region are distributed back into the African region. In 2012, the African Union (AU) formulated PIDA as a plan for medium- to long-term development of infrastructure by Africa for Africa, moving away from this type of infrastructure development.
Under PIDA, priority infrastructure projects have been selected as Priority Action Plans (PAPs) in the areas of 1) transportation, 2) information and communication technology (ICT), 3) energy, and 4) water, with the aim of building robust supply chains for the production, processing, and distribution of Africa’s resources within the African region. Priority infrastructure projects have been selected as Priority Action Plans (PAPs) in the areas of 1) transportation, 2) ICT, 3) energy, and 4) water (Phase I: 2012-2020, Phase II: 2021-2030, and Phase III: 2031-2040). The implementation of these infrastructure projects will be difficult to achieve without mobilizing funds from within and outside Africa, and the African Development Bank (AfDB) estimates that there is currently an annual infrastructure funding shortfall of $68-108 billion.
The second DFS, for which the African Union Development Agency (AUDA-NEPAD) served as the secretariat, brought together 1,200 participants, including heads of state and cabinet-level officials from African countries (5 presidents and prime ministers and 10 ministers), African institutions, development banks, partner countries, and investors to discuss concrete actions for the PIDA priority action plan. JICA contributed to the success of the Summit as the second DFS cooperating organization through JICA experts who were dispatched to AUDA-NEPAD.
Review of PIDA development plans over the past 10 years and discussion on how to promote them in the future: Ambassador Toshihiko Horiuchi, Permanent Representative of Japan to the AU, presented Japan’s contribution to PIDA at this meeting.
A Decade of Regional Infrastructure Development in Africa: First 10-year Progress of PIDA” was held on February 3 as one session of the second DFS plenary session. A Decade of Regional Infrastructure Development in Africa: First 10-year Progress of PIDA” was held on February 3.
This session reviewed the achievements and challenges in the decade since PIDA was adopted, and discussed what actions are needed to further promote the implementation of PIDA. Regional Economic Communities (RECs), and the Government of Japan.
From Japan, Ambassador Toshihiko Horiuchi, Permanent Representative of Japan to the AU, spoke on 1) Japan-Africa partnership through TICAD, 2) Japan’s contribution to PIDA, and 3) global governance, including sound development finance and rule of law. While appreciating the achievements of the PIDA Development Plan over the past decade, Mr. Bekele Thomas, Director General of AUDA-NEPAD, and Mr. Kazaura, Director General of AUC’s Infrastructure and Energy Department, stressed 1) a harmonized action plan for all PIDA agencies (and avoidance of duplication), 2) the need to ensure consistency between PIDA as a continental development plan and country-specific priority plans, and 3) the importance of the PIDA Development Plan. 3) the use of funds to support the initial phase of PIDA projects, etc., are important to accelerate the mobilization of public and private sector funds.
In his speech, Ambassador Horiuchi also mentioned the preparation of the 10-year PIDA Progress Report, which JICA is working on in collaboration with AUDA-NEPAD. It has long been pointed out that the lack of public disclosure of PIDA results and issues with sufficient numerical values and information is one of the reasons for the lack of progress in mobilizing PIDA funds, as it affects the investment decisions of donors. Against this background, JICA is conducting a comprehensive review of PIDA achievements and issues over the past 10 years.
Second Dakar Declaration: Action Plan for Mobilizing Funds for PIDA
The second DFS concluded with the issuance of the Dakar Declaration. The Declaration specified the following concrete actions to further accelerate the mobilization of funds
AU Member States Urged to Integrate PIDA Projects into National Priority Plans
AU Member States Urged to Strengthen Investor Risk Mitigation Systems
Requesting the use of innovative sources of financing for PIDA projects, such as sovereign wealth funds, pension funds, climate change finance, green bonds, etc.
Requests increased funding for the Fund to support the early stages of PIDA
Requests that international development finance institutions (MDBs and DFIs), guarantee funds, and banks ease lending conditions, including lowering interest rates and raising debt and deficit limits
AUDA-NEPAD requested to establish a mechanism for follow-up on DFS results and implementation
JICA will continue to strengthen its collaboration with AUDA-NEPAD to promote the implementation of PIDA and the African Continental Free Trade Area (AfCFTA), taking advantage of the growing momentum regarding regional integration in Africa.
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