Akinwumi Adesina, President of the African Development Bank, has urged Korean investors to capitalise on unexplored investment prospects in Africa, particularly in the energy and agriculture sectors.
“Africa is a continent that investors cannot ignore,” Adesina said at a business forum attended by CEOs of Korean corporations, heads of financial institutions, ministers and business leaders from Africa.
This forum took place at the 7th Korea-Africa Economic Cooperation Ministerial Conference, hosted in Busan, Korea's second-largest city.
Adesina highlighted the potential for Africa to become a leading market frontier, boasting vast opportunities in agriculture and renewable energy sources.
Adesina assured Korean investors, stating, “Africa is not as risky as you hear. It is a continent of opportunities waiting to be tapped.”
He cited Moody’s analysis of global infrastructure default rates, which shows that the continent ranks better at 5.5%, compared with 8.5% in Asia and 13% in Latin America.
The African Development Bank uses partial risk and credit guarantees to reduce the risks faced by the private sector.
Adesina observed that bilateral trade between Korea and Africa was important and growing but said its volume needed to be improved.
He said Korea’s trade with Africa in terms of exports and imports stood at only 2% of its total trade with the world. He added that this must change given Africa's huge economic opportunities and investment potential.
Adesina emphasised that “The size of consumer expenditures is estimated to be $2.5 trillion by 2030. The African Continental Free Trade Area (AfCFTA), the largest in the world in terms of the number of countries, is estimated at a $3.5 trillion market size. With a population of 1.3 billion, of which 600 m are young people, rapid urbanisation and rising incomes of the middle class, Africa is the leading emerging market frontier.”
Adesina outlined numerous sectors that offered huge opportunities, including energy and agriculture, which are expected to grow to $1 trillion by 2030. This includes the development of special agro-industrial processing zones in which the bank and partners have invested more than $1.5 billion in 11 countries.
In the energy sector, Adesina explained that Africa has enormous renewable energy potential, including 11 TW of solar, which is the highest in the world, but only one per cent is utilised.
With 350 GW of hydro, only 7% is utilised; 115 GW of wind potential, of which only 2% is used; and 15 GW of geothermal power, of which only 2% is utilised.
Addressing the forum, Byoung Hwan Kim, Korea's 1st Vice President and Minister of Economy and Finance, recognised that African countries were achieving higher growth rates, even in the face of global shocks.
Kim expressed his firm conviction in the vast investment opportunities available in Africa, surpassing those in other continents. He emphasised the crucial role of the private sector in unlocking these opportunities.
Kim recalled that Korea was one of the poorest countries in the world but was able to overcome this largely by focusing on its small businesses and the private sector.
“We hope to share those experiences with our African counterparts,” he said, adding, “We support the private sector to boost investment and provide guarantees tailored to private sector needs.”
Kim said that the Korean government would work with the African Development Bank to identify opportunities and use the KOAFEC Trust Fund to enhance the capacity of the private sector.
The meeting identified the African Continental Free Trade Area as a platform for mutual trade and investment.
During the forum, it was emphasised that Africa offers strong investment opportunities in green metals that could drive global market growth in clean renewable energy technologies, where countries can create jobs, stimulate economic growth, and reduce their dependence on fossil fuels.
Adesina said Africa is the perfect place to build batteries for electric cars and lithium-ion batteries.
The African Development Bank and the Government of Korea signed two agreements for financial support, valued at $28.6 million, to boost Africa’s development agenda.