Korea scales up its financial assistance for Africa’s economic transformation

26/10/2016
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President Adesina of the African Development Bank and Korea's Deputy Prime Minister, who is also Minister of Strategy and Finance, after signing an Exchange of Letters announcing Korea's replenishment to the KOAFEC Trust Fund on October 25, 2016 in Seoul.

The African Development Bank (AfDB) and the Korean Ministry of Strategy and Finance have signed an Exchange of Letters announcing Korea’s replenishment of a grant of USD 18 million to the KOAFEC Trust Fund for the year 2017-2018.

The KOAFEC Trust Fund is AfDB’s largest bilateral fund. Under the agreement, Korea will support the Bank’s strategic priority areas, commonly known as the “High Fives”, which seek to address the socio-economic challenges in Africa. The assistance, will among other things, develop Africa’s value chains, agro-poles and special industrial zones.  

The replenishment brings to USD 78 million the total amount provided by the KOAFEC Trust Fund to the African Development Bank. The fund has supported capacity building, technical assistance to African countries, as well as promoted the sharing of Korea’s economic development models with Africa. The Trust Fund has boosted a wide range of projects in transport, energy, water, agriculture and agro-industry.

Speaking at the ceremony, which took place within KOAFEC conference, AfDB President Akinwumi Adesina lauded Korea for its support and long-standing partnership with the Bank. “Korea is a strong partner for Africa’s development. You are dependable partners. You care, and you deliver,” he noted. The country joined the African Development Bank and African Development Fund in 1982 and 1980, respectively.

Having transformed its economy through policy reforms in industrialization, Korea will strengthen Africa’s ICT capacities through training and skills transfer, and will support regulatory framework development to woo private sector participation so as to enhance manufacturing and industrialization in Africa.

Il-ho Yoo, Korea’s Deputy Prime Minister and Minister of Strategy and Finance, reiterated his country’s support to Africa, citing the important role of the Trust Fund in strengthening the relationship between Korea and Africa. “We understand the challenges facing the continent. In order to ensure that African countries enjoy inclusive growth, we will share our knowledge on how we achieved transformation,” he said.

Yoo noted that his country’s development support for Africa would reflect the AfDB’s five priorities which are aimed at achieving Africa’s transformation in 10 years. These are Light up and power Africa, Feed Africa, Industrialize Africa, Integrate Africa, and Improve the quality of life for the people of Africa.

The signing ceremony also saw President Adesina, the Korean Ministry of Strategy and Finance, and four African countries (Kenya, Uganda, Tanzania and Ethiopia) re-affirm their commitment to co-financing four projects in the water, energy and agriculture sectors. Under the agreement, the Government of Korea will provide a concessional loan of USD 155 million to finance these projects through the Korea Exim Bank’s Economic Cooperation Development Fund (EDCF).

Kenya will receive up to USD 25 million to support development of multipurpose water resources, while Uganda’s share of USD 30 million is expected to boost agriculture and forestry conservation programs. For Tanzania, USD 50 million will assist in the construction of power transmissions grids. Ethiopia’s USD 50 million allocation will go to the development of agro-industrial parks.