Africa

Korea commits Sh1.8 trillion to support Africa's export trade

President William Ruto when he held talks with President Yoon Suk Yeol of Korea on the sidelines of the Korea-Africa Summit in Seoul on June 4, 2024. (Photo: PCS)

By Alfred Onyango | Wednesday, June 5, 2024

The Asian country also noted that the funding will seek to increase its Official Development Assistance ODA to Sh1.3 trillion by 2030.

The Republic of Korea has committed $14 billion (1.8 trillion) in export financing to support Korean companies investing in Africa in a bid to boost the continent's manufacturing sector.

Official data shows Africa's share of global manufacturing has declined from about three per cent in the 1970s to less than two per cent currently.

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The Asian country also noted that the funding will seek to increase its Official Development Assistance (ODA) to $10 billion (Sh1.3 trillion) by 2030.

The President of Korea, Yoon Suk Yeol announced the funding while addressing the opening forum of the inaugural Korea-Africa Summit, attended by 25 African heads of state.

Commenting on the commitment, African Development Bank Group president Dr Akinwumi Adesina, said the move clearly shows Korea's solidarity with Africa.

Transformation

He applauded Korea's transformation from being an aid-dependent country to becoming one of the largest donor countries in the world.

"However, I wish to request that Korea solidify this Korea-Africa Summit by agreeing to rechannel SDRs (Special Drawing Rights) to the African Development Bank," Adesina said.

Additionally, Adesina urged Korea to contribute generously to the forthcoming 17th replenishment of the African Development Fund, the concessional window of the Bank Group, as well as to the Alliance for Green Infrastructure in Africa (AGIA), a new initiative by the Bank, in partnership with the African Union and Africa50, to mobilize private financing for green infrastructure in Africa.

On his part, President William Ruto acknowledged the AfDB's financial innovations and urged Korea to consider channeling some of the Special Drawing Rights (SDRs) through the Bank.

On the sidelines of the Summit, AfDB held bilateral meetings with the Korean Minister of Agriculture, Food and Rural Affairs, Song Miryung.

As a result, it signed two agreements: A Memorandum of Understanding between the Bank and Korea Trade Insurance Corporation (K-SURE), and a Letter of Intent between the Bank and Korea Overseas Infrastructure and Urban Development Corporation (KIND).