Korea pledges $14bn in export financing and $10bn in development assistance for Africa by 2030
The Republic of Korea will commit $14 billion in export financing to support Korean companies investing in Africa, alongside increasing its official development assistance (ODA) to $10 billion by 2030.
President Yoon Suk Yeol announced these commitments at the opening of the first Korea-Africa Summit, which saw the attendance of 25 African heads of state and government, including Dr. Akinwumi Adesina, President of the African Development Bank Group.
The summit, themed “The Future We Make Together: Shared Growth, Sustainability, and Solidarity,” gathered representatives from up to 48 African countries, including presidents, kings, prime ministers, vice presidents, and ministers.
President Yoon pledged to extend Korea’s Trade and Investment Promotion Frameworks and Investment Protection Agreements to African countries. African leaders commended Korea for its collaborative approach to enhancing cooperation, emphasizing investment opportunities across the continent.
In his address, Dr. Adesina highlighted the importance of solidarity for shared growth, urging Korea to rechannel Special Drawing Rights (SDRs) to the African Development Bank. He noted that the IMF’s approval for the use of SDRs for hybrid capital, amounting to $20 billion, could potentially generate $80 billion in new financial support when channeled through the African Development Bank and other multilateral development banks.
Dr. Adesina also encouraged Korea to contribute to the 17th replenishment of the African Development Fund and to the Alliance for Green Infrastructure in Africa (AGIA), an initiative aimed at mobilizing private financing for green infrastructure.
The Korea-Africa Economic Cooperation (KOAFEC) Trust Fund, established by Korea in 2007, is the largest of the African Development Bank’s 17 active bilateral trust funds. Dr. Adesina praised Korea’s significant contributions, which total close to $795 million.
Rwanda’s President Paul Kagame and Tanzania’s President Dr. Samia Suluhu Hassan highlighted Korea’s rapid development as a model for Africa. President William Ruto of Kenya echoed the call for Korea to channel SDRs through the African Development Bank, recognizing the bank’s financial innovations.
Additional touchpoints of Korea-Africa relations include the jointly organized Korea-Africa Economic Cooperation Ministerial Conference (KOAFEC), the Korea-Africa Energy Investment Framework, and the $115.4 million KOAFEC Trust Fund. The first two projects under the Korea-Africa Energy Investment Framework have been approved, amounting to $57 million for Kenya’s Transmission Network Improvement Project and $52 million for Eastern Ethiopia’s Electricity Grid Reinforcement.
Summit co-chair Mohamed Ould Ghazouani, President of Mauritania and Chairperson of the African Union, emphasized the summit as a renewal of commitment to shared growth and mutual respect. Moussa Faki Mahamat, Chairman of the African Union Commission, called for enhanced bilateral trade relations, noting that Africa accounted for only 2% of Korea’s trade in 2022.
Leaders from Eswatini, Equatorial Guinea, Togo, Cote d’Ivoire, and Zimbabwe also spoke on the investment opportunities in their countries, encouraging Korean businesses to invest across the continent.
President Yoon concluded the summit by outlining Korea’s focus areas for partnership with Africa: digitalization, e-government, education, capacity building, climate change, food security, and critical minerals. A Korea-Africa critical minerals dialogue is set to be inaugurated later this year.
On the sidelines, Dr. Adesina held bilateral meetings with Korea’s Minister of Agriculture, Food and Rural Affairs, Song Miryung. The African Development Bank signed a Memorandum of Understanding with Korea Trade Insurance Corporation (K-SURE) and a Letter of Intent with Korea Overseas Infrastructure and Urban Development Corporation (KIND).
