Developments in Africa’s Free Trade Area: Opportunities for Korean Investors

The document analyzes the AfCFTA's potential to industrialize Africa and create a market of 1.3 billion consumers. It highlights a decline in Korea-Africa trade since 2011 and suggests that Korea leverage its strengths in capital goods, specifically the automotive and shipping sectors, to integrate into emerging African regional value chains. The authors recommend that Korea pursue formal economic partnership agreements with African regional economic communities, focusing on asymmetric trade liberalization and supporting Africa's green energy transition.

• The African Continental Free Trade Area (AfCFTA) is projected to increase Africa's total exports by 29% and intra-African trade by 81% by 2035, potentially raising the continent's income by 7%.
• Trade between the Republic of Korea and Africa peaked in 2011 and has since declined, with Korean exports to Africa representing only 1.1% of its total exports in 2019.
• Korea maintains a strong competitive advantage in heavy industries, specifically water vessels and locomotives; in 2021, Korean water vessel exports accounted for 38.5% of all such imports into Africa.
• The automotive sector is identified as a high-potential area for Korean firms like KIA and Hyundai to build production networks and regional value chains, particularly in Southern Africa.
• Implementation of the AfCFTA's Protocol on Trade in Goods (PTiG) has seen agreement on rules of origin for over 87% of products, though issues regarding motor vehicles and textiles remain unresolved.
• Africa's economy is characterized by low diversification and a high reliance on primary commodities, with agriculture employing more than 50% of the workforce by 2023.
• Korea lacks a competitive advantage in African infrastructure and energy provision compared to China, as well as in intermediate goods and household consumer items compared to India and China.
• The 'just energy transition' in Africa, highlighted by South Africa's $8.5 billion partnership with G7 members, presents an opportunity for Korean clean energy firms to provide technological expertise.
• The authors recommend that the Korean government pursue formal economic partnership agreements with African nations or RECs using asymmetric trade liberalization schedules to support less-developed partners.
• Nigeria, South Africa, and Egypt are identified as the three largest consumer markets in Africa, making them primary entry points for Korean businesses.

APA

MATOLA, J. U., & VAN GASS, C. (2022). Developments in Africa’s Free Trade Area: Opportunities for Korean Investors. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2022/08/Occasional-Paper-336-matola-van-gass-1.pdf

Chicago

MATOLA, JOSEPH UPILE, and CONRAD VAN GASS. Developments in Africa’s Free Trade Area: Opportunities for Korean Investors. South African Institute of International Affairs, 2022. https://saiia.org.za/wp-content/uploads/2022/08/Occasional-Paper-336-matola-van-gass-1.pdf.

Wikipedia

{{cite report |last1=MATOLA |first1=JOSEPH UPILE |last2=VAN GASS |first2=CONRAD |title=Developments in Africa’s Free Trade Area: Opportunities for Korean Investors |publisher=South African Institute of International Affairs |date=August 2022 |url=https://saiia.org.za/wp-content/uploads/2022/08/Occasional-Paper-336-matola-van-gass-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{matola2022developments, author = {MATOLA, JOSEPH UPILE and VAN GASS, CONRAD}, title = {{Developments in Africa’s Free Trade Area: Opportunities for Korean Investors}}, institution = {South African Institute of International Affairs}, year = {2022}, month = aug, url = {https://saiia.org.za/wp-content/uploads/2022/08/Occasional-Paper-336-matola-van-gass-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }