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Ethiopia, South Korea sign a $1billion financial deal to fund projects

Toronto – South Korea was hosting the South Korea-Africa summit; over thirty African nations have attended it including Ethiopia and neighboring Eritrea.  Ethiopia was one of the countries that participated in the Korean War in the 1950s on the part of South Korea which laid a foundation for the relation between the two countries. 

Ethiopia, South Korea sign a $1billion financial deal to fund projects

Ethiopia’s Prime Minister Abiy Ahmed seized the occasion to make a state visit on the sidelines of the summit. 

A Memorandum of Understanding for a financial deal of $1 billion is signed between the two countries, according to Ethiopian State-owned media outlets. South Korea is to make the funds available for Ethiopia in the form of loans over the next four years. 

The fund will finance projects to be completed over the next four years. Infrastructure, science and technology, health, and urban development projects are areas that will be funded with the loan. No further specific detail is specified about the projects or their location.

The rate of interest or what South Korea is getting in return for making the finance available for Abiy Ahmed’s administration is not specified. Referring to the financial agreement with Ethiopia and Tanzania, Reuters reported that South Korea will get “access to Africa’s crucial mineral resources and vast export market.” 

Ethiopia’s Minister For Finance, Ahmed Shide, and his South Korean Counterpart,  Kim Byoung-hwan, signed the agreement. A report by the Ministry of Foreign Affairs of Ethiopia said Ahmed Shide urged South Korea to “increase financial support to Ethiopia” by highlighting the financial reform measures in the country.  South Korea is cited as saying that it “is keen to provide Ethiopia further financial assistance.” 

Prime Minister Abiy Ahmed’s administration has introduced a range of core neoliberal economic policy measures over the past few years but the policies were packaged as “Home Grown” policy measures. The Telecom and Banking sectors are open to foreign investors. Recently, the administration also disclosed its intention to allow foreigners to own property in Ethiopia. 

Source: Borkena

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