Japan said on Friday it would call for a new aid plan for African nations at a meeting of major industrial powers next week which involved a greater role for international institutions. "We felt there was a need to present Japan-distinct views, based on our experiences in Asia," Finance Minister Sadakazu Tanigaki told reporters. Finance ministers and central bank governors from the Group of Seven (G7) industrial powers are set to meet in London next week and host Britain is seen wanting more debt relief for Africa. Japan said it would propose to set up a special fund within the African Development Bank to promote areas such as assistance for smaller firms. It would aim to pool $200 million over five years, of which Japan would contribute 20 percent. It would also propose to extend loans of $1 billion over five years, to the African Development Bank through the Japan Bank of International Cooperation with interest rates below one percent. Japan will also aim to help African nations nurture an environment in which they can take on credit. It would propose that countries which have sufficient frameworks to take on loans be able to do so by cutting their debt with international financial institutions. Japan also called for an expansion of the Poverty Reduction and Growth Facility (PRGF) at the International Monetary Fund and to make PRGF loans interest-rate free. To expand the PRGF, a loan facility for poorer nations, Japan proposed to use gold reserves held by the IMF, either by selling the reserves or reassessing their value. Japan has helped extend aid to developing nations in Asia via international organizations such as the Asian Development Bank and has been behind in helping Africa.
