South Korea to provide billions in loans to East Africa for natural wealth access

By Chinedu Okafor, June 03, 2024

East Africa is poised to benefit from significant South Korean investment as the Asian nation seeks to expand its access to the region’s natural resources. A recent report indicates that South Korea has focused on East Africa, particularly Ethiopia and Tanzania, to secure these resources. In return, South Korea has agreed to extend substantial loans to several countries in the region.

Ethiopia and Tanzania have confirmed the execution of loan agreements with South Korea, amounting to billions of dollars. This initiative is part of a broader commitment that will grant South Korea access to Africa’s crucial natural riches and vast export market.

In Tanzania, a concessional loan agreement worth $2.5 billion over five years has been established. Additionally, Tanzania has signed agreements allowing South Korea to utilize its maritime resources and minerals essential for clean energy technologies, such as nickel, lithium, and graphite. This was announced by presidential spokesman Zuhura Yunus on Sunday.

Tanzania’s President Samia Suluhu Hassan has also expressed intentions to collaborate with South Korea in sustainable ocean resource use, natural gas deposit development, and creative industries. Additionally, Tanzania aims to provide labor to South Korea. This partnership builds on previous collaborations, including a memorandum of understanding signed in November 2022 between the Tanzania Startup Association (TSA) and the Korean Startup Forum (KSF).

Ethiopia, on the other hand, has confirmed a $1 billion financing deal over four years to support infrastructure, science and technology, health, and urban development, as reported by the state-affiliated Fana media outlet.

These developments follow the South Korea-Africa summit held this week, where over 30 heads of state were invited. South Korean President Yoon Suk Yeo has met with several African leaders, including those from Sierra Leone, Tanzania, and Ethiopia. Meetings with leaders from Zimbabwe, Togo, Rwanda, and Mozambique are scheduled for Monday.

This substantial financial engagement underscores South Korea’s strategic efforts to secure vital natural resources while fostering economic development in East Africa.

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