President Samia Suluhu Hassan of Tanzania and President Yoon Suk Yeol of South Korea witnessed the signing of a bilateral agreement on Blue Economy development by Tanzanian Foreign Minister January Makamba and Korean Minister of Fisheries and Maritime Affairs, Kang Do-Hyung. Photo: State House
Tanzania-South Korea Forge Strategic Partnership, Sparking Concerns Over Foreign Dependency
By Adonis Byemelwa
President Samia Suluhu Hassan of Tanzania and President Yoon Suk Yeol of South Korea witnessed a landmark signing at Seoul’s Presidential Palace. Tanzanian Foreign Minister January Makamba and Korean Deputy Prime Minister Choi Sang Mok inked a vital cooperation deal, securing a significant loan from Korea’s Economic Development Cooperation Fund (EDCF).
This agreement involves a loan provided by the Korean Government’s Economic Development Cooperation Fund (EDCF). The signing ceremony took place at the Presidential Palace in Seoul.
Tanzania and South Korea have agreed to cooperate in research, investment, and capacity building to add value to strategic minerals, particularly nickel, lithium, and graphite. The agreements were signed on Sunday, June 2, 2024, at the Presidential Palace in Seoul, witnessed by President Yoon Suk Yeol and President Samia Suluhu Hassan, who is on a six-day visit to South Korea to strengthen the 32-year-old bilateral relationship.
Yesterday, on the fourth day of her visit, President Samia met with President Yoon and witnessed the signing of agreements and a joint declaration between the two countries. According to a statement released by Zuhura Yunus, Director of Presidential Communications, the two nations signed two memoranda of understanding and a joint declaration to establish an Economic Partnership Agreement (EPA).
To open more avenues for trade and economic cooperation, Tanzania and South Korea have signed an EPA agreement that will enable strategic cooperation, particularly in trade, investment, and industrial sectors.
“This agreement will enable Tanzania to receive a loan of USD 2.5 billion from Korea over five years from 2024 to 2028. These funds, intended for development infrastructure, will be provided under the Korean Government’s Economic Development Cooperation Fund (EDCF),” the statement explained.
The memoranda of understanding signed today includes cooperation in the blue economy, with Tanzania collaborating with South Korea in fishing, marine product processing industries, construction of fishing ports, marine technology, and research.
“Tanzania is among only three African countries that will engage in these negotiations, leading to an Economic Partnership Agreement with Korea. The other countries are Morocco and Kenya,” the statement said.
The statement mentioned that President Samia proposed cooperation in new sectors, including the development of natural gas energy, the creative sector such as arts and films, and opening the Korean job market to Tanzanian youth through the Employment Permit System (EPS) program.
In another development, Tanzanian students pursuing higher education in Korea expressed their intention to use the skills they have acquired to improve services and the operation of the modern Standard Gauge Railway (SGR), which is set to begin in July 2024.
John Shirima from the Land Transport Regulatory Authority (Latra) stated that the knowledge gained from his master’s degree in electrical engineering would be used to enhance service delivery on the new modern train.
“Latra is responsible for ensuring safety in the SGR project, including the safety of the coaches, passengers, and employees. Economically, Latra also sets fare prices. I believe that after completing my studies, I will be part of this responsibility, and with the vast experience we have gained from our Korean counterparts, we will manage and operate our railway efficiently,” said the student.
Adam Kimbewele from the Tanzania Railways Corporation (TRC) stated that the education they are receiving is part of the preparations for operating the SGR to provide quality services to the citizens.
“Since the corporation cannot educate everyone, we will disseminate the knowledge we have acquired here to our colleagues so that we all have a common understanding in managing and operating our railway,” said the student from Woosong University.
Speaking about the training for Tanzanians, TRC Director General Masanja Kadogosa said that currently, 25 students are receiving training in Korea, and they plan to establish a Knowledge Center in Dodoma to provide training for railway technicians and engineers in the country.
“Korea has a railway college, and we are still behind,” stated TRC Director General Masanja Kadogosa. “While the National Institute of Transport (NIT) works on establishing a railway studies degree, we will immediately set up a Center of Excellence in Dodoma to train our experts.”
However, economics pundits warn that signing numerous contracts with multiple big powers can have significant economic repercussions for developing countries. “Relying heavily on foreign aid and expertise creates dependency, undermining the development of local industries and skills,” said one expert.
When several foreign powers control critical projects, there is often a lack of cohesive strategy, leading to fragmented infrastructure development. This results in inefficiencies and increased costs, as projects may not align well with national priorities or existing systems.
Political economic analysts, who requested anonymity, highlight that these agreements often come with stringent terms and conditions, potentially leading to unsustainable debt levels. “Developing countries may find themselves diverting substantial portions of their budgets to debt repayment rather than investing in essential sectors like healthcare, education, and local business development,” noted one analyst. The economic sovereignty of these nations can be compromised, as they become beholden to the political and economic agendas of their creditors.
Critics also point out the risk of unequal benefits. “Foreign companies involved in these projects might prioritize their profits, repatriating significant portions of the earnings back to their home countries,” said a critic. This limits the positive economic impact within the developing nation, as local employment opportunities and reinvestment in the local economy may be minimal.
Eventually, while foreign investments and loans can accelerate development, they must be approached with caution to ensure they promote sustainable growth and enhance local capabilities without creating long-term dependencies and financial vulnerabilities.
Ultimately, while foreign investments and loans can accelerate development, they must be approached with caution. Developing countries should ensure that such agreements are balanced, promoting sustainable growth and enhancing local capabilities rather than creating long-term dependencies and financial vulnerabilities.
