Many African nations have seen strong growth due to an increase in foreign direct investments, as well as the export of natural resources.
According to the World Bank, 6 of the 10 fastest expanding economies in the world over the past decade were African countries, and a 5.3% growth for sub-Saharan Africa is expected this year
“African countries are now receiving attention as potential consumption markets and production bases, as well as sources of natural resources,” said Kim Hwan-nyeon, a researcher at Samsung Economic Research Institute.
Africa has massive quantities of mineral deposits such as diamond, cobalt, platinum, manganese and a myriad of other metals, and is seen as the foremost force behind the massive inflow of foreign capital.
In 2010, Africa accounted for 12.3% of the global oil production and 6.5 percent of gas.For Korean companies such as POSCO, SK Innovation and Daewoo International, Africa is a untapped source of revenue which is likely to grow at a steady rate over the next decade.
POSCO is developing an iron ore mine in Cameroon, a copper field in the Democratic Republic of Congo and a coal reserve in Mozambique. In Zimbabwe, it agreed with local firm Anchor Holdings to launch a mining venture.
The Koreaqn Ministry of Knowledge Economy predicts that roughly 25 Korean companies will more than triple their investments in developing overseas resources this year.
In the telecom sector, mobile giants such as Samsung and LG are turning their sights to the region.
In May 2011, Samsung said it aimed to gain 10 billion dollars in revenue by 2015 in sub-Saharan Africa.
Meanwhile, LG teamed up with Etisalat in June 2011 to pierce the Middle Eastern and African Markets. LG would supply the 200 million subscribers to Etisalat with their TV contents.
“Much of the growth in Sub-Saharan Africa came from improved domestic demand, which contributed 5.4 percentage points to GDP increase last year,” the World Bank said in a report.
Korean President Lee Myung-bak called Africa the “hope for the future of this planet,” vowing to help with the region’s prosperity during his visit to Ethiopia in July 2011.
“African economic development driven by its billion people will create new demand, greatly contributing to the constant growth of the global economy in the 21st century,” Lee said at an Addis Ababa University.