Kenya eyes South Korea growth formula, signs Sh120 billion loan

Economy

Kenya eyes South Korea growth formula, signs Sh120 billion loan


ruto-south-korea

President William Ruto inspecting a guard of honour. Kenya is eyeing to replicate the South Korean economic model in a bid to spur growth and create jobs. PHOTO | PSC

Kenya is eyeing to replicate the South Korean economic model in a bid to spur growth and create jobs by boosting key sectors amid an Sh120 billion loan from the Asian country.

The two countries Wednesday signed deals that will see South Korea transfer agricultural technology and its vast ICT know-how to Kenya, helping boost the quality of farm produce, create more jobs among the youth and also tap the vast potential in the energy sector.

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The Kenya National Chamber of Commerce and Industry (KNCCI) signed the deals with the Korea Institute of Procurement and SDG Youth and the agreements are key to increasing market and job openings for Kenyans and local goods in the Asian nation.

Kenya is banking on the deals to help spur economic growth in a similar model that the Asian nation used to turn around its economic fortunes from the struggles of the 1950s and 60s.

President William Ruto who is leading the Kenyan delegation said that the technology transfer from South Korea will significantly grow Kenya’s exports and create jobs.

“We will implement strategies that increase farm productivity and seek your government’s support for agricultural mechanisation as well as cooperation in research and technological innovation,” Dr Ruto said Wednesday.

The talks also saw Kenya secure an Sh120 billion ($1 billion) loan from South Korea to fund projects in health, ICT and agriculture, energy, housing and urban transport.

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KNCCI Chair Richard Ngatia “invited Kenyan and Korean businesses to build on the momentum of the forum’s discussions and the newly established partnerships to leverage on greater business opportunities.”

The Asian nation is home to global electronic giants such as Samsung and LG and leading automobile firms including Hyundai and KIA Motors.

South Korea lagged in Kenya in economic growth in the 1950s and Nairobi gave the Asian nation a $10, 000 loan and relief food when the country was ravaged by starvation after the Korean War.

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But adoption of technology helped grow South Korea’s economy and turned it into a global superpower. The Asian nation’s GDP per capita is estimated at $34,994 compared to the $2,006 of Kenya.

Kenya’s trade with South Korea is heavily tilted in favour of the Asian economy and the deals are expected to lower the trade deficit.

Data from the Economic Survey shows that Kenya exported Sh3.91 billion worth of goods to South Korea last year and shipped in goods valued at Sh54.21 billion from the Asian nation.

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