The African Export-Import Bank (Afreximbank) and the Export-Import Bank of Korea (KEXIM), yesterday, entered into a memorandum of understanding expected to inject $100 million to support trade between Africa and South Korea, a statement by the two institutions indicates.

Under the deal, signed in Seoul, South Korea by Afreximbank president Dr Benedict Oramah and his KEXIM counterpart, Dr Lee Duk-Hoon, KEXIM will extend a $100 million loan to Afreximbank to support trade transactions between South Korea and Africa as part of a commitment by the two institutions to co-operate in matters of common interest.

They will also explore the possibility of establishing other financing schemes to promote trade between South Korea and Africa, according to the statement. 

Dr Oramah said the credit facility was ‘timely’ given Afreximbank’s current focus on financing importation of capital goods to accelerate the structural transformation of African economies. Dr Lee, on his part, noted that, in spite of current economic challenges facing most African economies, the continent’s growth prospects remained positive.

KEXIM supports South Korea’s export-led economy by providing loans and financing big projects. Afreximbank finances and promotes intra- and extra-African trade.

In 2015, Africa’s imports from South Korea stood at about $9.8 billion, down from $13 billion in 2014, while the continent’s exports to South Korea also declined to $5.8 billion in 2015, from  $7.9 billion the previous year.