DEVELOPMENT DIPLOMACY

Scramble for Africa intensifies as Korea joins the party

On Friday, July 26, Korea Overseas Infrastructure & Urban Development Corporation, a state-owned Enterprise, inaugurated its KIND Africa Office in Nairobi,

In Summary

• For AfCFTA to succeed, Africa needs gigantic infrastructure, and in consequence, Africans are spending more on infrastructure.

• KIND’s initiative will deliver desired results if the Government of President MOON Jae-in can formulate a clear policy on Africa.

President Uhuru Kenyatta and President Park Geun-hyeof South Korea witness the exchange of a MoU between the Agriculture Ministry and the Export-Import Bank.
President Uhuru Kenyatta and President Park Geun-hyeof South Korea witness the exchange of a MoU between the Agriculture Ministry and the Export-Import Bank.
Image: PSCU

To say that China, with her nonpareil financial muscle, is fundamentally altering the character of African nations is not news. What is news is that Korea, which has significant strengths, has decided to join the battle for the soul of Africa.

On July 26, Korea Overseas Infrastructure & Urban Development Corporation, a state-owned Enterprise, inaugurated its KIND Africa Office in Nairobi, Kenya. They wear the badge of DFI — Development Finance Institution — and PPP Project Developer and Investor.

 A high-powered delegation from South Korea led by Kim Seong-ho, Director-Construction Policy Bureau, Overseas Construction Policy Division, Ministry of land, infrastructure & Transport, and Lim Han-kyu, Executive Vice President, KIND, attended the grand opening ceremony. Amb. Choi Yeong-ha led the Korean diaspora and agencies in Kenya. 

Nancy  Karigithu, PS State Department for Maritime and Shipping Affairs led the Kenyan delegation.

 
 

This initiative will cast the next episode of David and Goliath fight in the 21st Century. For South Korea, it will be a question of courage, faith, and overcoming what seems impossible.

KIND has made two very good decisions. The first is the entry point to Africa. Kenya’s geostrategic position is very fitting to house KIND Africa Office as Nairobi is the business hub for the region and has been the gateway to Africa for a very long time. It is also in the midst of one of the greatest infrastructure expansions in human history.

In addition, Kenya has excellent transparent governance structures, friendly policy and regulatory environment, and one of the most advanced public-private partnership architecture in Continental Africa.

Second, the timing is also perfect in two ways. The operationalisation of the Africa Continental Free Trade Area, the instrument for industrialisation and integration of Africa with an objective of the aspirations of the Agenda 2063, and the 2030 Agenda for Sustainable Development was on July 7 in Niger.

For AfCFTA to succeed, Africa needs gigantic infrastructure, and in consequence, Africans are spending more on infrastructure.

The Infrastructure Consortium for Africa (ICA) report-Infrastructure Financing Trends in Africa 2017, reveals that overall commitment to Africa’s infrastructure increased to $81.6 billion in 2017 from $66.9 billion in 2016. African subnational governments spending increased to $34.4 billion from $30.7 billion the previous year.

Now enters the Dragon. Chinese infrastructure investments shot up from $6.4 billion to $19.403 billion, an increase of $13 billion. When you compare this with the top four Asian economies, China was followed by Japan, $2.361 billion, India at $704 million, and South Korea at $10 million. For South Korea, this was a huge drop from the 2016 commitment of $432 million.

 

China is winning in Africa because of its clear policy on Africa implemented through the Belt and Road Initiative, China-initiated Asian Infrastructure Investment Bank. Benin, Djibouti, and Rwanda memberships were approved this July and the Forum on China-Africa Cooperation.

 

The implementation has been very successful because of the vibrant Chinese embassies in Africa. But behind the masks of Chinese embassies and SOEs is a very powerful hit squad of amphibious and elusive politicos from the International Department of Central Committee of Communist Party of China (CPC) crisscrossing from one State House to another in Africa, almost on a daily basis.

South Korea does not need to follow the Chinese model. As noted during the 2018 OECD DAC Peer Review meeting  in February 2018, “Korea is playing a role as a bridge in the international community as a responsible middle-power based on its own development experience.”

KIND’s initiative will deliver desired results if the Government of President MOON Jae-in can formulate a clear policy on Africa. The areas to be strengthened are the Official Development Aid (ODA) and the Country Partnership Strategy (CPS).

In 2016, Korea’s net ODA totalled about $2.25 billion, ranking 16th among 29 OECD DAC members. ODA as a percentage of GNI reached 0.16 per cent, ranking 26th among OECD DAC members. Korea hopes to reach the target of 0.2 per cent ODA/GNI by 2020. This is still way below the recommended target of 0.7 per cent.

In addition, take note that ODA financing accounted for 62 per cent of all ICA member commitments in 2017.

In regard to Priority Partner Countries, Korea has selected 24 priority states out of 134.  Seven of these are in Africa (Ghana, Rwanda, Mozambique, Senegal, Ethiopia, Uganda, Tanzania).

Under the current mid-term strategy for Development Cooperation, CPS 2016-2020 program, the African countries were allocated a mere $271.8 million.

“Korea is playing a role as a bridge in the international community

South Korea through KIND can have a major impact on Africa, if it focuses on niche infrastructure in stable and progressive African Countries such as Kenya. Kenya’s advanced PPP architecture and especially the joint ventures through Privately Initiated Investment Proposals is the gateway to the soul of Africa.

The writer is the first Kenyan ambassador to the Republic of Korea (2009-2014)