AfDB’s Adesina pitches Africa’s $1trn agriculture potential to Korean investors

By Onome Amuge.

Akinwumi Adesina ,president of the African Development Bank (AfDB) has called on Korean investors to seize untapped investment opportunities in the continent, especially in the agriculture sector expected to grow to $1 trillion by 2030.

Adesina made the call at a business forum during the just concluded 7th Korea-Africa Economic Cooperation Ministerial Conference, held in Korea’s second-largest city, Busan.

Addressing CEOs of Korean corporations, heads of financial institutions as well as ministers and business leaders from Africa,the AfDB president highlighted the potential for Africa to become a leading market frontier as it boasts enormous potential in agriculture and renewable energy sources which cannot be ignored by investors.

He assured the Korean investors that Africa, With a population of 1.3 billion, of which 600 million are young people,was not as risky as reported, adding that It was a continent of opportunities, waiting to be tapped.

Adesina observed that bilateral trade between Korea and Africa was important and growing, but said its volume needed to be improved being that Korea’s trade with Africa in terms of exports and imports stood at only two per cent of its total trade with the world.

He said this must change given Africa’s rapid urbanisation and rising incomes of the middle class, huge economic opportunities and investment potential, and a rising consumer expenditure size  estimated to be $2.5 trillion by 2030, which places the continent as a leading emerging market frontier.

Adesina also highlighted several sectors that offered huge opportunities, including energy and agriculture,noting that the latter has witnessed the development of special agro-industrial processing zones in which the bank and partners have invested more than 1.5 billion dollars in 11 countries.

Dwelling on the energy sector, the AfDB president clearly stated that Africa has enormous renewable energy potential, including 11 terawatt of solar, which is the highest in the world, but only one percent is utilised.

He also noted that though Africa has a capacity of 350 gigawatt (GW)of hydro,of which only seven per cent is utilised; 115 GW of wind potential of which only two per cent is used; and 15 GW of geothermal power of which only two per cent is utilised, an indication of a market awaiting investment opportunities.

According to Adesina, Africa, with an abundant number of renewable energy resources,  is the perfect place to build batteries for electric cars and lithium-ion batteries.

On his part, Byoung Kim, Korea’s 1st vice president, acknowledged that there were enormous opportunities for investment in Africa compared to other continents.

Sharing his conviction, the Korean minister of economy and finance noted that despite global shocks, African countries were experiencing higher growth rates that could be better improved if the private sector harnesses the investment opportunities to boost investment and provide guarantees tailored to private sector needs

Kim promised that the Korean government will work with AfDB to identify opportunities and use the KOAFEC Trust Fund to enhance the capacity of the private sector.

Meanwhile, the African Development Bank (AfDB) and the Government of Korea have signed two agreements for financial support, valued at $28.6 million to boost Africa’s development agenda.

The funding complements $600 million in co-financing under the Korea-Africa Energy Investment Framework, agreed with the Korean government in 2021, expected to  support African countries in building human capacity and developing their energy sectors.

Business A.M gathered that the new funding to be disbursed to the African Development Bank Group in three instalments: $4.6 million in 2023, and $24 million in 2024 and 2025, will primarily support energy access, agricultural transformation, and knowledge and capacity-building across a number of African countries.

According to officials, under the agreement with Statistics Korea, an agency under the ministry of economy and finance, the two institutions will work together to raise statistical awareness and share new data sources and methods to improve statistical quality, including big data.

The agreement document identifies areas for possible cooperation, such as the AfDB’s Africa Information Highway for evidence-based decision-making. The Africa Information Highway is a mega-network of live open data platforms electronically linking all African countries and 16 regional organisations.

Figures presented by the AfDB show that the Korea-Africa Economic Cooperation Trust Fund is the largest of the bank’s active bilateral trust funds in terms of contributions received and portfolio size. The fund which had received $108 million in contributions as of 31 December 2022, has financed about  203 projects since its inception.