November 24, 2024

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An aerial view of the city of Dar es Salaam in Tanzania (123rf)

South Korea has been seeking to bolster ties with Africa, with its vibrant economies, young population and abundant natural resources. Tanzania, among others, is emerging as a key partner at a time when countries around the world are competing to secure high-value natural resources amid fast-reshaping supply chains for key industrial sectors.

Korea has also been working to elevate economic ties with Tanzania, home to 633 million people – Africa's fifth-largest nation by population. The African country is expected to be ranked among the top 10 fastest-growing economies this year, with its growth outlook projected to reach 5.5 percent.

In March, Korea’s Trade Minister Cheong In-kyo met Tanzanian Ambassador to Korea Togolani Edriss Mavura to discuss ways to bolster economic cooperation between the two countries, where Cheong hailed the great growth potential of Africa.

"Trade and investment volume between Korea and African countries is not so big yet. But Africa has formed a massive single market of 1.4 billion people via the African Continental Free Trade Area," Cheong said following the meeting.

"The continent has a great potential for growth and holds importance geo-economically, having abundance in natural resources," the minister said, adding that the envisioned Economic Partnership Agreement (EPA) between Korea and Tanzania will provide the foundation for stable trade relations, but also in other areas including supply chain establishment, digital technology and green economy.

Since Korea and Tanzania established diplomatic ties on April 30 in 1992, the trade volume has seen steady growth over the past decades. According to the Korea International Trade Association, the trade volume between the two countries doubled to $376 million last year from $165 million in 2017.

The number of Korean firms tapping into the Tanzanian market is also increasing. As of December 2023, there are 40 Korean companies operating offices in Tanzania, and the cumulative investments they have made in the country total $15.1 million, according to the Export-Import Bank of Korea.

One of the latest business deals is Posco International’s contract with Faru Graphite, a Tanzanian subsidiary of Australian mining company Black Rock Mining, for a long-term supply of natural graphite, a crucial material in lithium-ion batteries for electric vehicles. Faru Graphite’s Mahenge mine is the world’s second-largest natural graphite mine.

Under the contract, Posco International said it will invest $10 million to secure 750,000 tons of natural graphite for the next 25 years. Its battery-making sister firm, Posco Future M, plans to use the materials for its EV push.

Tanzania's President Samia Suluhu Hassan (Getty Images)

President Yoon Suk Yeol will hold summit talks with African leaders on June 4 and 5 in Seoul – the first such summit ever among the leaders of all African countries and South Korea.

Tanzanian Ambassador to Korea Togolani Edriss Mavura said the upcoming summit is expected to break barriers between Korea and Africa and initiate a new era of robust cooperation.

"Tanzania in particular is an economic door to East Africa for Korean investments through the African Continental Free Trade Area," Mavura said in an interview with The Korea Herald in January.

Korea was able to become the world's 10th-largest economy without robust economic ties with African nations. In the future, Korea "has the potential to enter the top five and beyond should it embrace trade with Africa," the ambassador said in that interview.

"Tanzania and Korea strategically need one another," Mayura said in January.

"We need Korean stories in Tanzania, and we need Tanzanian stories in Korea."

By Jo He-rim (herim@heraldcorp.com)