SEOUL: African ambassadors and South Korean trade experts are exploring the economic potential of bilateral ties between Korea and Africa during the Africa Day Business Forum, co-hosted by The Korea Herald and the African Group of Ambassadors.

In a panel discussion mediated by Tunisian Ambassador to Korea Kais Darragi in Seoul last Thursday, they discussed ways to attract more investment into African countries.

Hong Soon-young, vice-president of the Export-Import Bank of Korea, urged African nations to go all-out to build infrastructure, elaborating on how countries like China, India and Vietnam have successfully secured growth by attracting foreign direct investment (FDI).

“Currently, about 70% of the FDI in the world is going to developing countries, but less than 5% of it is made in Africa. Asia and Latin America are taking over 95% of it,” Hong said.

“African countries suffer from the vicious cycle of constant fiscal deficit, low productivity, and a lack of jobs, which leads to talent leakage. For economic growth, I believe the answer is FDI.”

Hong also encouraged African countries to consider using South Korea’s official development assistance programme, the Economic Development Cooperation Fund, which offers a low interest rate of 0.2% for up to 40 years.

Lee Kwang-bok, director of the urban and property development unit at Korea Overseas Infrastructure and Urban Development Corp, stressed a “blended finance policy”, which combines official development assistance with other private and public resources.

“Rather than hoping major companies make risky investments in Africa, we should strengthen investor-friendly support packages,” Lee said.

Such packages can be expensive, but that is the way to attract private firms that are “very responsive” to even minimal incentives, he added.

For potential cooperation, South Korea and African countries should look into premium consumer goods, the biomedical sector and agriculture fields, Kim Young-sang, the director of the overseas emissions reduction team at the Korea Trade-Investment Promotion Agency said.

Egypt Ambassador Khaled Abdel Rahman highlighted how the economic ties between South Korea and African countries will improve the quality of life for many in the African continent, citing renewable energy and digital innovation as key sectors for further cooperation that would bring benefits for many.

 - ANN