Here’s how South Korea dominated negotiations of new deals with Africa
The recent South Korea-Africa Summit which had several African leaders in attendance, engendered several agreements between both parties.
In a nutshell, South Korea indicated an interest in Africa’s natural resources in exchange for bilateral arrangements with African countries.
However, the negotiations went more the way South Korea intended than the way African leaders may have wanted.
A report by The East African revealed that South Korea maintained the upper hand in its negotiations with numerous African countries during the South Korea-Africa Summit.
While the Asian country made its interests in Africa’s resources clear, it also insisted on what it would be able to trade in exchange for the minerals, and what some African leaders demanded was not included in the list of what South Korea was willing to give up. However, South Korea has already kicked off a few partnerships with some African states.
On Tuesday, several African heads of state gathered in South Korea’s capital city; Seoul to offer the country a structured supply of natural resources, ensuring that it has access to vital raw materials necessary for its energy transition.
This offer was included in an agreement signed by South Korean leaders and representatives from over 40 African nations participating in the South Korea-Africa Summit.
The report by the East African revealed that South Korea’s President Yoon Suk Yeol and African Union Chairperson, Mohamed Ould Ghazouani, announced the arrangement, stating that the two parties will engage in high-level conversations to explore supplies from Africa’s mineral-rich countries.
South Korea which is just now deciding to explore the African market for its resources is also set to discuss how it can Invest in mineral extraction as well as how to add value to the commodities. They promised to do this while also serving as “a model example of sustainable development of global mineral resources.”
On the surface, this seems like a mutually beneficial and fair deal, however, Africa was denied some of the demands they made in exchange for its minerals.
Kenyan President William Ruto welcomed the agreement noting that a partnership between South Korea and African countries is pivotal to the fourth industrial revolution. However, he requested that South Korea play a bigger role in ensuring funds are available to Africa via Special Drawing Rights (SDRs).
He asked that the Asian nation increase its contributions to the “concessional lending window to enable African countries to effectively respond to economic shocks and pursue developmental agendas.”
“We also urge Korea, working with the International Monetary Fund, to consider channeling Special Drawing Rights (SDRs) to the African Development Bank.” the Kenyan president added.
However, South Korea refused to add this demand to the agreement, but instead settled for increasing its contributions to Africa to $10 billion by 2030, as well as giving export finance of around $14 billion to Koreans seeking trade and investment in Africa “as a catalyst for projects of cooperation with Africa.”
The majority of these funds will be channeled through the expansion of the Korean Economic Development Cooperation Fund (EDCF).
Additionally, African leaders asked that Korea transfer its technology, particularly in the areas of robotics, biotechnology, artificial intelligence, and related areas.
This too was not included in the joint declaration, despite South Korea’s pledge to offer people-to-people exchanges including research cooperation.
They instead promised to share expertise in other aspects of its technology industry including, the Customs e-Clearance system (UNI-PASS), the Korea On-line E-Procurement System (KONEPS), and the Korean Statistical Information Service (KOSIS). Whether or not it will entail real technology transfer was unclear.
These demands African leaders made went unmet since South Korea is fixated on Economic Partnership Agreements (EPAs), Trade and Investment Promotion Frameworks (TIPFs), Double Taxation Avoidance Agreements (DTAAs), and Investment Protection Agreements (IPAs) with Africa.
The Asian country argued that these sorts of deals would “facilitate mutual access for each other’s products to their respective markets.”
Since the start of the South Korea-Africa Summit, a few African countries, particularly in the East African Sub-region have signed significant agreements with South Korea.
Ethiopia and Tanzania confirmed the signing of agreements with South Korea for billions of dollars in loans, as part of a larger promise to provide the Asian nation access to Africa’s crucial natural resources.
Tanzania stated that it has reached an agreement with South Korea for a $2.5 billion concessional loan that would last five years. Tanzania also signed two agreements with Korea over the use of its maritime resources and minerals used in clean energy technologies such as nickel, lithium, and graphite, presidential spokesman Zuhura Yunus said on Sunday.
Ethiopia, on the other hand, acknowledged the signing of a $1 billion finance arrangement over four years to support infrastructure, science and technology, health, and urban development, according to the state-affiliated Fana media source.
Kenya received $238 million in funding from the Korea Exim Bank for a digital center at Konza Technopolis in Machakos County.
