South Korea announced on Wednesday a $5-billion bilateral financial assistance package for Africa to be delivered in two years.
The Government of Korea made the announcement in a joint declaration with the African Development Bank following the conclusion of the Ministerial Roundtable of the Korea-Africa Economic Cooperation (KOAFEC) Conference taking place during the African Development Bank’s 53rd Annual Meetings.
The Ministerial Roundtable is the signature event of the biennial KOAFEC Conference, gathering a peer group of African Ministers of Finance who also serve as the African Development Bank Board of Governors to discuss topical issues and a pan-African approach to engagement with Korea. Taking place under the theme “Africa and the 4th Industrial Revolution: Opportunities for leapfrogging?”, the Ministerial Conference highlighted the need for long-term planning for industrial development and execution of projects, as well as a focus on value addition in sectors where Africa has comparative advantage for example in agriculture and natural resources. There was also a need to further leverage technology such as the mobile phone for more inclusive growth, in favor of the youth.
The $5-billion financial assistance package will be delivered over two years through partnerships with various development agencies, including but not limited to the African Development Bank Group. The package leverages resources from various Korean bilateral agencies and platforms, including the Knowledge Sharing Program, the Economic Development Cooperation Fund, Korea Import-Export Bank, among others. Specifically, African Development Bank President Akinwumi Adesina and the Deputy Prime Minister of Korea, Dong Yeon Kim, signed three cooperation agreements for the implementation of certain components of the $5-billion package by the Bank Group. The first was the extension of the General Cooperation Agreement which allowed for the replenishment of the KOAFEC Trust Fund housed at the African Development Bank with $18 million. The Trust Fund, now totaling $93 million will continue to provide critical capacity building grants and resources for project feasibility studies. An Action Plan of 20 KOAFEC projects were endorsed during the Conference for 2019-2020 destined for a diverse group of countries and sectors.
The Bank and the Republic of Korea also signed an agreement for the intent to provide up to $600 million towards the energy sector. The Bank and the Government of Korea also signed an MOU for the Korea-AfDB Tech Corps Program which will allow for the exchange of technical expertise and human resources, to address ongoing challenges of youth unemployment in both regions. On the occasion, President Adesina noted that “Africa needs to build, and we will build, wider partnerships for development. We want to build strong investment partnerships with Asia going forward.”
The next KOAFEC conference will be held in 2020.