Deal-making at the South Korea-Africa Summit sees Africa Rack Up Billions in Investment Commitments

By Prince Kurupati

On June 4 and 5, South Korea hosted the inaugural South Korea-Africa Summit. The Summit saw 48 heads of state from the African continent as well as several African Heads of Delegations and leaders of international African organizations gather in Seoul at the KINTEX International Exhibition Center with the sole objective of laying the foundation towards promoting sustainable co-prosperity between Africa and South Korea.

The first of its kind South Korea-Africa Summit ran under the theme: "The Future We Make Together: Shared Growth, Sustainability, and Solidarity.” To help come up with collaborative solutions that will bring Africa and the Republic of Korea closer, the Summit was designed specifically as a comprehensive platform for discussion and engagement. South Korean President Yoon Suk Yeol led the proceedings and gave the opening remarks.

President Yoon Suk Yeol said his country is ready and willing to partner with Africa with its main first port of call being to invest in the critical minerals and technology industry. The Republic of Korea is a huge manufacturer of batteries and electric vehicles. With Africa hugely endowed with critical minerals such as nickel, cobalt, lithium and graphite which are the main resources needed in the production of batteries and electric vehicles, cooperation and collaboration between Africa and South Korea will truly see both reap rewards from each other.

In his closing remarks, President Yoon said, "The Critical Minerals Dialogue launched by South Korea and Africa will set an example for a stable supply chain through mutually beneficial cooperation and contribute to the sustainable development of mineral resources around the world."

The South Korean President also called upon African nations to stand in solidarity with his country in its persistent and protracted feud with North Korea. He said with Africa contributing 54 states to the United Nations bloc and holding three significant rotating seats on the Security Council, Africa can spearhead a successful international pressure campaign against North Korea.

Demonstrating the newly established camaraderie between Africa and South Korea, the two at the end of the Summit issued a joint statement which affirmed their commitment to the full implementation of the United Nations Security Council resolutions against North Korea and highlighted the “importance of the efforts of the international community to achieve a complete, verifiable, and irreversible denuclearization of the Korean Peninsula.”

Present at the Summit were some African nations which have for long been receptive and cordial with North Korea such as Zimbabwe, Uganda and Mozambique. It's to be seen therefore how these countries will handle their diplomatic affairs with both North and South Korea.

The Summit couldn't have come at a better time for both South Korea and Africa as trade between the two currently accounts for less than 2% of South Korea's total imports and exports. Away from the session of heads of state and international organizations, a series of conference sessions on various topics, including business, agriculture, ICT, forestry and desertification, vaccine and health security, tourism, energy, and more took place on the sidelines of the Summit. Deal-making was the order of the day during these series as experts in various areas discussed partnerships and synergies to enhance trade, promote investment and bring about sustainable development.

In addition to investing in the critical minerals and technology industry, the South Korean government pledged and committed to expand its cumulative development aid contributions to Africa to around $10 billion by 2030 and separately provide $14 billion in export financing to encourage South Korean investment on the African continent.

"To boost cooperation with Africa, South Korea will expand ODA (Official Development Assistance Program) to around 10 billion dollars until 2030. Also in order to encourage South Korean trade and investment in the region, South Korea will provide 14 billion dollars in export financing," said President Yoon.

Other deals sealed during the Summit include the "Tech4Africa" initiative where South Korea will invest in the education of training of Africa's young population especially in the artificial intelligence and technology fields. Through this initiative, the hope and belief is that Africa's young population will take charge in bringing about the development of sustainable infrastructure in Africa, including data-driven smart cities and intelligent transportation systems as the continent has some of the world’s least-developed infrastructure.

President Yoon as reported by Reuters agreed with the leaders of Tanzania to provide $2.5 billion in concessional loans and Ethiopia for $1 billion in financing to go to infrastructure, science and technology and health and urban development. Kenyan President William Ruto said South Korea would provide $485 million in concessional development funding.

For South Korea, the benefits to be derived from the newly established partnership between itself and Africa goes beyond the deals it signed. Rather in addition, South Korea by embracing Africa taps into a vast and fast-growing market that is home to 1.4 billion people, the majority of whom are 25 or younger.

Speaking after the signing of several bilateral and multilateral agreements between and amongst African governments, the South Korean government and various development partners and international organizations, the President of Mauritania Mohamed Ould Ghazouani who is also the current chairperson of the African Union praised the move made by the South Korean government saying it paves the way for an influx of investment opportunities in “important sectors such as commerce, new technologies, energy, food, security, human capital and infrastructure”. He said the commitments made at the Summit prove that a "durable partnership" is in the offing.

Commenting on South Korea's collaboration with Africa, former South Korean ambassador to Uganda and South Africa Park Jong-dae said that what his country is offering is a valuable alternative path as compared to the Western style of assistance which has for long failed Africa.

"The essence of the Korean model of development cooperation is human development, and about management, rather than about provision of assistance per se... Korea has the experience and know-how of development ... while many African countries have immense possibilities for development based on yet to be explored, untapped resources and endowment, and dynamic young population," Park Jong-dae said.