The Korea-Africa Center sponsored an all-day Korea-Africa Business Forum on October 25 at the Korean Chamber of Commerce and Industry in downtown Seoul. Private and public sector experts discussed major obstacles facing Koreans looking to invest in Africa. In her opening remarks, South Korean Foreign Minister KANG Kyung-wha spoke about Korea’s relatively small investment in Africa, given the continent’s tremendous potential. Among the 14 panelists were DR & AJU’s South Africa- /UK-qualified Africa Desk Head Timothy DICKENS; Ali KHALPEY, CEO of Egypt-listed investment bank EFG Hermes Frontier; Africa Finance Corporation (AFC) Executive Director Oliver ANDREWS, an infrastructure financing specialist; and George JOSEPH, Senior Vice President of agro-business multinational Olam.
The one piece of advice echoed most by panelists was to partner with a local firm to gain firsthand experience and knowledge of the market. As languages, customs and consumers vary widely across the continent, it is important to understand each unique environment and show interest in advancing together. AFC Director Andrews stressed the need to find a partner willing to take risks and share the costs of financing. He cautioned against using outdated methods, such as relying on ties to a national leader’s relatives. Other panelists also stressed African businesses’ strong reliance on corporate governance. A trait borne out most strikingly by South Africa ranking # 1 in terms of “strength of auditing and reporting standards” and “protection of minority shareholders’ interests” in the World Economic Forum’s 2016/17 Global Competitiveness Index. South African native Tim Dickens recommended law firms as a good source for finding suitable partners as they have considerable knowledge about the reputations and financial soundness of firms in a variety of sectors.
CEO Khalpey informed would-be investors that Africa is looking for partners with transferable technology and skills. “Capital is already sitting in Africa,” he said, emphasizing the availability of local funding. Olam VP Joseph advised patience and locating in an “oasis of excellence,” i.e., areas in or near industrial parks with secure access to energy; infrastructure; skilled labor; and markets across the continent, the EU and America. Mr. Joseph also praised Africa’s leapfrogging over the old stages of industrialization, citing the ability of renewable energy and mobile phone money transfers to spark growth in areas once seen as remote.