Kenya targets funds from Japan through Samurai Bond issuance

President William Ruto (right), Burundi President Evariste Ndayishimiye (centre) and South Africa's Cyril Ramaphosa during the 9th Tokyo International Conference on African Development (TICAD 9) in Yokohama, Japan, on August 21, 2025. [PCS] Kenya will raise funds from Japanese capital markets through issuing a Samurai Bond. The revelation emerged at the ongoing Tokyo International Conference on African Development (Ticad) 2025 summit in Yokohama, Japan. The move reflects President William Ruto's - who is attending the conference - broader policy of diversifying financing options for national development, shifting away from traditional donor dependency. For decades, African nations have largely depended on foreign aid to meet their development needs. However, this trend is gradually changing, as demonstrated by the discussions between African Heads of State and the Japanese government at the conference, which closes today. A Samurai bond is issued in Japan's financial markets by a foreign government and is denominated in Japanese yen. Ruto said the plan is a leap forward in the country's innovative policy of diversifying resource mobilisation. This announcement followed a bilateral meeting between President Ruto and Japanese Prime Minister Shigeru Ishiba. Ruto commended the signing of a statement of intent on the Samurai Bond. "There is, therefore, a need to agree on a list of priorities, especially in enhancing e-vehicle mobility. We have had discussions with Toyota Corporation on expanding this opportunity," he said. However, the specific terms of the bond were not disclosed. The funds from this bond can be utilised as a subsidy to promote investments from Japanese automakers and other industries. The signing took place during the three-day conference, attended by about 50 African leaders. "Ishiba welcomed the progress made in supporting the expansion of manufacturing production by developing human resources in the automotive and other industries," the statement read. This initiative comes more than a year after the Japanese government first announced plans for Kenya to issue a yen-denominated Samurai Bond worth Sh 438 million. The offering was expected to close within four months of the announcement made in February of the previous year, with proceeds earmarked for the 2024/25 fiscal year. Last year, President Ruto indicated that the Samurai Bond would likely carry an interest rate of between one per cent and two per cent, significantly lower than domestic borrowing costs. During the summit, Kenya also signed a Letter of Intent and Concept Note to Accelerate Access to Cefiderocol, a crucial antibiotic approved for effective treatment of bacterial pneumonia, in Kenya. The agreement also provides for the supply of the medicine with support from the Global Antibiotic Research and Development Foundation. It was signed between Kenya's Ministry of Health and Shionogi and Company of Japan, which specialises in pharmaceutical research, development and manufacturing. The Kenyan government also signed a Memorandum of Cooperation on human resource development between the Kenya Industrial Research and Development Institution and the Japanese Ministry of Economy, Trade and Industry. At the event, Japan entered into trade agreements with several African countries to promote car exports and other forms of commerce. Tokyo's long-term goal is to conclude trade agreements with all of Africa, viewing East Africa as a key hub for trade across the Indian Ocean. smkawale@standardmedia.co.ke and envisioning an economic zone that links Africa to India and the Middle East. In addition to East Africa, Nigeria is a significant player due to its large population of over 230 million and its status as Africa's largest crude oil producer, coupled with growing domestic demand. Ghana, a rising trade hub in West Africa, is also being considered for potential trade agreements. During the summit, it was noted that transportation costs increase due to tariffs imposed at various points along overland routes from ports to landlocked areas. Eliminating these tariffs would create a more favorable business environment for Japanese companies looking to expand into Africa. Prime Minister Ishiba expressed the need for Japan to deal with tariff and non-tariff barriers so that Kenyan agricultural produce, including avocados and tea, can get more access to the Japanese market. In 2024, Japan exported about 1.3 trillion yen (approximately $8.85 billion) in goods to Africa and imported a similar amount, according to the Japan External Trade Organization. Japan's exports to Africa mainly consist of automobiles, including used cars, while its imports are primarily mineral resources. The summit takes place on the backdrop of the African Development Bank's prediction of 3.9 per cent economic growth for the continent this year, with 21 countries expected to exceed 5 per cent growth. Ethiopia, among the fastest-growing African nations, is forecast to surpass 7 per cent. Africa's gross domestic product (GDP) exceeds $2.8 trillion, which is about 70 per cent of Japan's GDP. This economic expansion is driven by population growth, as Africa is home to 1.5 billion people, with a median age of 19. The population is projected to reach 2.5 billion by 2050, accounting for a quarter of the world's population. The African Continental Free Trade Area (AfCFTA) aims to eliminate tariffs on 97 per cent of goods traded within the continent, although negotiations are still ongoing. Japanese Prime Minister Shigeru Ishiba has stated that Japan's government intends to support efforts to enhance the AfCFTA. It was revealed at the summit that Japanese companies are ramping up their presence in African markets. In 2015, Japanese or Japanese-funded companies had 687 sites in 38 African countries. By 2024, this number increased to 948 sites in 40 countries, marking a 40 per cent growth over the past ten years. Yuga Kasai, the Africa Accounting Advisory Chief Executive Officer, who participated in the TICAD business expo and conference, stated that his firm has been involved in resolving social issues in Africa through projects that utilize drones and AI to combat malaria and provide electricity to off-grid areas. "We are here to help Japanese companies navigate the complexities of doing business in Africa," he added. At the Kenya stand - Kenya Export Promotion and Agency, the Chief Executive Officer, Floice Mukabana, said Kenyans stand to benefit immensely at the conference, saying the return on investment comes from the ideas and objectives of the lineages at the forum. "The linkages come in terms of trade inquiries which can be shared with exporters in Kenya. We have collected enough data of potential buyers who are willing to share details with exporters back home, " she told the Standard.

Kenya targets funds from Japan through Samurai Bond issuance

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