South Korea is a blossoming country, with its economy achieving rapid growth since the 1980s. It boasts huge technological prowess, showcasing global competitiveness across diverse sectors, including mobile phones, steel production, semiconductors, automobiles, and electric vehicles.
As the economy flourishes, so does its network of diplomatic ties across the globe. We recently had the pleasure of attending The South African Trade and Investment Seminar in Seoul, engaging with investors and stakeholders to discuss an optimistic economic outlook and spark valuable conversations about the long-standing relationship between South Korea and Africa.
The relationship has been growing from strength to strength. South Korea is South Africas fourth largest trading partner in Asia, investing in key areas like energy, infrastructure, health, digital technology, and agribusiness. Preparations are even underway in Seoul for the upcoming Korea-Africa Summit set to take place in June, gathering senior officials and ambassadors for discussions on building mutually beneficial collaborations between the two regions.
Despite decades of sustained growth in South Korea, reaching the next phase of economic prosperity hinges on the deepening of collaborative partnerships with other nations. Africas wealth of resources and potential presents promising avenues to propel Koreas transition to the next level, offering huge opportunities for economic development.
Several South Korean industries stand to gain from the mutually beneficial investment ties with Africa. The challenge is pinpointing high-yield sectors and how to inspire investor confidence between the two nations.
Catalysing the high-tech industrySouth Korea sits at the forefront of the global digital economy, boasting a world-renowned high-tech industry. Many of the biggest names in the industry have their roots in South Korea, such as Samsung and LG Electronics. There is also a thriving community of tech startups in the region, with many entrepreneurs flocking to Korea to build on the countrys chip manufacturing capabilities, including new firms producing next-generation AI chips .
However, the high-tech industry relies heavily on having a stable supply of critical minerals. Materials like lithium, cobalt, silicon, and copper play a vital role in the production of semiconductors, batteries, and electricity networks. Obtaining a reliable mineral supply is crucial to ensure the growth of the high-tech industry does not grind to a halt; however, natural resource reserves in the country are very few and far between.
With its plentiful critical mineral reserves, Africa offers a promising investment opportunity for savvy Korean investors. The continent contains around 85 percent of the worlds manganese, 80 percent of platinum and chromium, and 47 percent of cobalt, as well as vast deposits of lithium, phosphate, and nickel placing it as a key force to fuel the South Koreas high-tech industry.
Driving the electric vehicle movementAnother key industry that would benefit from a reliable supply of critical minerals is the electronic vehicle (EV) sector. The EV market has skyrocketed in recent years as the clean energy transition picks up pace. EV sales have more than tripled in just three years, and this market is expected to sustain steady growth as the world moves away from oil.
South Korea is leading this trend in Asia, with its technological success and robust automotive industry spearheading its advancements in the EV sector. Key stakeholders in Africa are also striving to claim their stake in the rapidly growing EV market, although it remains at an earlier stage of development than its Korean counterparts. But while they are at different phases in their EV journeys, there is a real opportunity for a mutually beneficial investment relationship between South Korea and Africa to propel the industry to the next level.
Firstly, Africa holds critical minerals essential for EV production and battery manufacturing. Collaborating with African nations to responsibly extract and process these resources will offer a sustainable supply chain for Koreas automotive industry. Whats more, Africas urban centres are flourishing offering a burgeoning market for EV adoption. Africa is experiencing rapid urbanisation, with cities expected to be home to 900 million more people by 2050. By investing in infrastructure development, such as EV charging points and roads, South Korean investors could tap into this vast consumer base. This could prove to be a lucrative venture for these investors, with infrastructure projects in Africa often seeing high equity returns and low default rates.
Building ties through open conversationsThe topic of strengthening the relationship between South Korea and Africa was a key part of our discussions during our trip to Asia. However, bridging
