Korea to offer $5 billion to Africa

Finance and Strategy Minister Yoo Il-ho delivers opening remarks at the 2016 Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference held at the Grand InterContinental Hotel in southern Seoul, Tuesday. / Yonhap

KOAFEC meeting boosts bilateral partnership

By Kim Tae-gyu

Korea plans to offer $5 billion for 61 projects in Africa over the next two years, the country made the agreement Tuesday at the 2016 Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference.

In a joint statement, the two sides selected major areas of cooperation such as agricultural revolution and energy development. Toward that end, a $10 billion package will be created in four years and half of them will be channeled in the first two years.

Specifically, an agricultural-industrial complex will be built in Ethiopia and litigation infrastructure will be placed in Kenya. Also included is development of a power grid in Tanzania and energy infrastructure financing in Egypt and Botswana.

Toward that end, officials of 41 African countries and major African regional institutes convened in Seoul, also as part of efforts to elevate partnership between the potential-rich continent and Korea.

This marks the fifth edition of the biennial KOAFEC meeting, which was set up in 2006 through multilateral efforts involving Korea's Finance and Strategy Ministry and the African Development Bank (AfDB).

The 2016 meet-up theme is "transforming Africa's agriculture through industrialization and inclusive finance."

"We will capitalize on all means available to boost collaboration with Africa like KOAFEC funds, knowledge-sharing programs and economic cooperation development fund (ECDF)," Finance and Strategy Minister Yoo Il-ho said.

ECDF is Korea's representative aid fund, which has helped a flurry of emerging economies to expand their infrastructure and accelerate development since its foundation in 1987.

The knowledge sharing program was launched in 2004 to provide experiences and expertise of Korea, which has chalked up exponential growth during the past few decades.

High-fives

Yoo said that Korea would underpin the five priorities of the AfDB, which was drawn up as part of Africa's 10-year transformative agenda when its President Akinwumi Adesina inaugurated a year ago.

Included in the five areas, dubbed the "high-fives," are to light up and power Africa, feed Africa, integrate Africa, industrialize Africa and improve the quality of life for the people of Africa.

Under the ambitious scheme, the AfDB strives to galvanize development of the continent so as to reduce poverty and improve people's livelihood.

"Korea will proactively take part in several projects, which would take place in line with the ‘high-five' initiatives," said Yoo who doubles as deputy prime minister. "The $10 billion package created in this year's meeting would also cover them."

The $10 billion package would be forged for the following four years through a variety of channels including the knowledge-sharing programs and EDCF.

Enhanced partnership

Yoo noted that the 2016 KOAFEC gathering where 300-plus representatives including 20 chief executives of private companies took part will further strengthen teamwork of Korea and Africa.

"Korea and Africa has advanced hand in hand to achieve practical economic development and secure the joint growth platform. Over the next 10 years, our partnership will improve to an unprecedented level," he said. "Let's move together for forward-looking alliance of Korea and Africa."

His remarks are in tandem with those he delivered at the opening dinner of the event held at Grand InterContinental Hotel in southern Seoul, Monday.

"We need to clearly remind ourselves that Africa is the continent of unmatched potential and ample opportunities. Its young population, abundant natural resources and enhanced private sector competitiveness can be a big push for Africa's economy in the near future," he said.

"All of us are here to be better partners for each other just like a gathering of individual trees make a beautiful and dense forest. I believe that the three-day KOAFEC Conference will provide us with a great opportunity to deepen our friendship."

The KOAFEC, which was established in 2006, has played a pivotal role in beefing up the partnership between Korea and African countries as amply demonstrated by elevated bilateral cooperation.

In the past decade, Korea's Official Development Assistance (ODA) to Africa jumped six times while its direct investments in the continent also rocketed seven times.

As a result, the ODA to Africa amounted to $332.7 million as of 2014, carving out around a fourth of the country's total contributions.

In addition, Korea's cross-border transactions with African countries stood at $18.2 billion in 2015 while the former's investment in the latter was $146 million in the same year.

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