Timely SA-Saudi trade boost for local economy

Cape Town - 160315 - Pictured left to right is Dr Iqbal Survé, Dr Rob Davies, Sidwell Medupe and Dr Tawfiq bin Fawzan Al Rabiah. The announcement of a R5 billion solar power plant in the Northern Cape is one of the highlights of the 7th session of the South Africa Saudi Arabia Joint Economic Commission (JEC), which took place in Cape Town today and was officiated by the Saudi Arabia Minister of Commerce and Industry, Dr Tawfiq bin Fawzan Al Rabiah and his South African counterpart, Minister of Trade and Industry, Dr Rob Davies. Picture: David Ritchie

Cape Town - 160315 - Pictured left to right is Dr Iqbal Survé, Dr Rob Davies, Sidwell Medupe and Dr Tawfiq bin Fawzan Al Rabiah. The announcement of a R5 billion solar power plant in the Northern Cape is one of the highlights of the 7th session of the South Africa Saudi Arabia Joint Economic Commission (JEC), which took place in Cape Town today and was officiated by the Saudi Arabia Minister of Commerce and Industry, Dr Tawfiq bin Fawzan Al Rabiah and his South African counterpart, Minister of Trade and Industry, Dr Rob Davies. Picture: David Ritchie

Published Mar 15, 2016

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Quinton Mtyala

 

SOUTH Africa could expect more trade with Saudi Arabia, after government officials and businesses from two countries concluded discussions which would see increased bilateral investments in the areas of energy, mining, agricultural produce, food processing and finished products.

 

Increased trade ties between the two countries will be on the agenda when President Jacob Zuma travels to Saudi Arabia later this month on a state visit accompanied by a business delegation.

In addition a South African trade mission will visit Saudi Arabia in August, with South Africa lending support in terms of its knowledge of mining. Saudi Arabian companies are expected to participate in next year’s mining indaba, which is scheduled for February.

On Monday the two countries, along with ACWA Power, launched the R5 billion Solafrica Bokpoort Concentrated Solar Power project in the Northern Cape, which is set to provide 220 000MW/hour annually, enough to power 200 000 homes.

Trade and Industry Minister Rob Davies said ACWA Power would be involved with the construction of an even bigger, “double the size”, renewable energy project, which also used concentrated solar power, in the Northern Cape.

“What’s unique about that is that it’s the only form of renewable energy that is capable of performing after dark.

“Because it has a storage facility it can continue to generate power for at least nine hours after the sun goes down,” said Davies.

Saudi Arabia was South Africa’s largest trading partner among the Gulf states and globally the country was among the top five import partners, largely due to oil imports.

“Between 2011 and 2014 Saudi Arabia’s exports increased from R32bn to R82bn, but this upward trend in imports was interrupted in 2015 when the value of our imports decreased by 50 percent or more to R39bn… This was mainly attributable to the fall in the oil price,” said Davies.

The kingdom’s commerce and industry minister, Tawfiq al-Rabiah, said he would encourage more investment into South Africa from Saudi business people.

Rabiah said South African business people travelling to Saudi Arabia were issued with business visas on the same day of applying, which were valid for a year.

The Saudis were looking for more co-operation in the mining sector and were hoping to tap South Africa’s expertise and technology.

Rabiah said the support ACWA Power had received from the South African government had prompted the company to increase its investments in the country.

“We do encourage more investment from the Saudi side into South Africa and on our side we welcome investment from South Africa into Saudi Arabia. We do have a total of 19 investments from South Africa in Saudi Arabia, nine industrial and 10 in the service sector, the total of these investments is about $700 million,” said Rabiah.

Davies said since the commission was revived, the countries have maintained the discipline of holding the meetings annually in each other’s cities.

“We should continually strive to make it even more effective by addressing any shortcoming there may be |in addressing our relations, and to this end frequent exchanges and visits between business delegations of our two countries need to be encouraged,” said Davies.

The meeting had agreed that the two countries should diversify their trade relations, with exports from SA to Saudi Arabia increasing last year it could not reverse a trade deficit caused by oil imports.

“Sixty-two percent of our export basket to Saudi Arabia consists of primary products – primarily agricultural and mineral products – and our ambition would be to increase the proportion of higher value-added products in our export basket.”

South Africa sought to export agricultural produce, and processed foods to Saudi Arabia. “We are continuing through the Department of Agriculture, Forestry and Fisheries to engage with Saudi Arabia to clear some of the matters which will allow us to export poultry, beef into Saudi Arabia, bearing in mind that South Africa has |a well-respected and well-policed halaal system.”

He said Saudi Arabia remained strategically important for SA, and the strong relations between the two were signified by the frequent sessions of the joint commission.

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