Kenya eyes more investments ahead of Korea-Africa summit

Kenyan Ambassador to Korea Emmy Kipsoi addressing investors in Seoul ahead of Korea-Africa Summit. [Courtesy]

Kenya is positioning itself to attract more investments from South Korea as the continent prepares for the Korea-Africa Summit slated for June 4-5 in Seoul.

A pre-summit held in Seoul saw Kenya rally itself as the preferred destination for investment on the backdrop of a Sh1.3 trillion ($10 billion) target of foreign direct investment (FDI) by President William Ruto’s administration.

The inaugural Korea-Africa Summit will offer Korean investors the opportunity to explore market entry strategies into Africa and enhance their understanding of cooperation measures, particularly in light of the full implementation of the African Continental Free Trade Area (AfCFTA) agreement.

This summit seeks to improve the trade balance between the two markets - particularly for Kenya whose exports to South Korea have been growing annually at 16 per cent according to the Kenya Private Sector Alliance (Kepsa) to hit Sh4.6 billion ($35.7 million) in 2021.

Trade deficit

Leaders from all 54 African countries are expected to attend the summit that will enhance trade between Korea and Africa, which currently accounts for only three per cent of Korean exports and one per cent of imports.

Kenya imports more from Korea compared to its exports - with the trade deficit standing at Sh59.5 billion ($458 million) in 2021 - hence the desire to explore areas of cooperation with African countries across all sectors, including infrastructure, agriculture, healthcare, technology, energy and social development.

Kenya is however not waiting for the summit and has started wooing Korean investors on its own as noted by Kenya’s Ambassador to Korea Prof Emmy Kipsoi.

“We are the most stable democracy in East Africa founded on the rule of law which provides a predictable and safe environment for investments,” said the ambassador at a pre-summit meeting.

“On a pure dollar basis, Kenya receives more venture capital than any other country on the continent, dramatically outperforming other leading countries, including Nigeria, Egypt, and South Africa, when scaled to their respective gross domestic products.”

The pre-summit conference which showcased Kenya’s potential to Korean investors was organised by Seoul law firm Jipyong LLC and Nairobi-based legal firm G&A Advocates LLP.

The two law firms entered into a collaboration arrangement in April to support Korean companies interested in entering the African market. Additionally, the pact will provide support for African firms seeking to do business in South Korea and the larger Asian region.

“Kenya has a raft of investment promotion laws with attractive features such as fiscal and non-fiscal benefits, multiple dispute resolution mechanisms including specialised dispute bodies, and policy fostering an open economy and trade liberalisation,” G&A’s partner and Head of Corporate, Commercial Sylvia Kithinji told Korean investors at the pre-summit.

“Necessary protections exist in law and select bilateral agreements to safeguard against key threats to investment such as expropriation, double taxation, monopolies, infringement of intellectual property rights.”

Jiopyong LLC, which used the event to ramp up support for Kenya as an investment hub for Korean investors said Nairobi has made trade and investment policies that make it attractive.

“The government’s medium-term economic growth plan focused on spurring industrialisation has driven demand for infrastructure and offered a strong foundation for the emergence of promising sectors - including construction, manufacturing, healthcare and green energy,” said Min Chung, Jipyong’s Group Leader of Business Intelligence.

Kenya is already a hub for several Korean companies such as Samsung Electronics, Hyundai, Daewoo and Korea Telecom. Nairobi, however, wants to use the summit to ramp up more foreign direct investments from Seoul.

Kenya’s main exports to Korea include coffee, titanium ore, and scrap copper among others. Kenya imports include iron and steel, organic chemicals, machinery, nuclear reactors, boilers, and manmade staple fibres, among others.

According to the Kenya National Bureau of Statistics, the value of imports from South Korea increased from Sh22.3 billion in 2021 to Sh50.2 billion in 2022, mainly due to increased imports of kerosene-type jet fuel.

Exports equally increased to Sh6.1 billion, from Sh3.9 billion.

Korean Government Representative for the 2024 Korea-Africa Summit Jung Kihaong said all preparations have been made to establish a new framework of cooperation, which will pave the way for Korea to invest in Africa, allowing both regions to grow together.