Johannesburg - As President Zuma touched down in Tehran on Saturday, a business and political delegation of almost 200 South Africans were anxiously waiting for him in the city’s top three hotels.
Most won’t have time to marvel at the city surrounded by snow capped mountains with its abundance of pistachios, saffron, and ancient mosques. Every minute counts on this two day state visit, with huge investment opportunities to capitalise on in oil and gas, mining, financial services, agriculture, and tourism.
Iran is an old ally, on the rise following the lifting of nuclear related sanctions. As Minister of International Relations Maite Nkoana Mashabane said on her visit in May last year, “Iran is South Africa’s second home.” When Deputy President Cyril Ramaphosa visited Iran in November last year for a three day visit, also with a delegation of 200 South Africans, he presided over the launch of the South Africa-Iran business council.
Zuma’s visit is strategically aimed at consolidating these business ties, on what is only the third time that a South African President visits Iran since 1994. Nelson Mandela made two visits to Iran as President, expressing his gratitude for the stand taken by Iran during the apartheid era as the revolutionary Government cut ties with the apartheid state when it came to power in 1979, and refused to sell oil to the country.
After Iran lifted sanctions and re-established relations with South Africa in 1994, trade between the two countries soared, and by the end of 2011 South Africa was importing a third of its domestic oil requirements from Iran. But the imposition of nuclear-related sanctions had impacted negatively on trade relations, and by June 2012 South African exports to Iran had declined from R1.27-billion to R270-million in 2014. The recent lifting of sanctions now provides immense potential for commercial and investment cooperation.
The South African Presidency has called Zuma’s state visit “an important structural catalyst in elevating bilateral and economic relations into a substantive strategic partnership.” Zuma is accompanied by a large delegation of South African ministers which include the ministers of Minerals, Energy, Trade and Industry, Economic Planning, Water and International Relations.
Iran’s President Rouhani has said that Iran has a unique strategic position in the region as its southern coasts and ports can link South Africa to Central Asia and Eastern Europe. Rouhani has made two visits to South Africa, and the Iranian Foreign Minister has already brought a 100-strong business delegation to South Africa.
The South African companies accompanying the President are likely poised to take advantage of opportunities to invest in oil and gas, now that Iran has boosted its oil output by 400,000 barrels a day to an average output of 3.2 million bpd. Within a year it hopes to be producing 4 million bpd, restoring output to pre-sanction production levels. In addition to SASOL and PetroSA, Eskom, Transnet, and Denel are amongst the plethora of companies lining up to sign MOU’s in Tehran today. Iran’s banking system is ready to facilitate business transactions, and swift is ready for most international banks.
Foreign Bureau