Japan is exploring new ways to support Africa’s debt-laden economies by offering low-cost loans. With rising fiscal pressures at home and growing populism curbing appetite for aid, Tokyo plans to recycle repaid loans from Southeast Asian countries into low-cost, concessional debt for African nations. This approach directly addresses the continent’s soaring debt servicing costs, largely driven by high-interest Chinese lending and Eurobonds. While Japanese firms remain hesitant to invest heavily in the continent, this financial engineering allows Tokyo to sustain its development role without increasing aid spending. The strategy offers African leaders a vital counterweight to Chinese financing and helps mitigate recent aid cuts from Western nations. This nuanced pivot emphasizes Japan’s long-term philosophy of “development first, business later,” seeking to replicate its Southeast Asian success in Africa through stability and smart finance rather than sheer volume.
FT
