South Africa projects trade increase with Saudi Arabia
South Africa and Saudi Arabia have agreed to increase total trade between the two countries to a targeted R60 billion within the next five years.
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This was agreed on at the fourth session of the South Africa-Saudi Arabia Joint Economic Commission (JEC), held from 28 to 29 April in Riyadh, Saudi Arabia. Trade and Industry Minister Rob Davies and his Saudi counterpart, Minister Tawfiq Al-Rabiah, co-chaired the JEC.
Davies said the current total trade between the two countries stood at R34 billion in 2011. This represented an annual growth rate of about 32.6% in just one year. Total trade in 2010 amounted to R26 billion.
“From the vantage point of the trade balance, South Africa always had a negative trade balance with the Kingdom of Saudi Arabia. This ranged from a deficit of about R23 billion in 2007 when the credit crunch hit to a deficit of R29 billion in 2011.
“There is no doubt that the level of our bi-lateral trade is far below potential and is also concentrated in a few sectors like oil and gas, raw materials and fruits and vegetables. This points to a need to diversify our baskets of goods traded,” he said.
More value added and diversified trade would benefit both countries as it will lead to job creation, which was one of the single biggest challenges at present, Davies added.
The two countries agreed that the level of investment was far below potential and undertook to work together to explore several initiatives to address the situation.
“To this end, the launch of the South African – Saudi Arabia Holding as an investment holding company is welcomed, as it will accelerate the development of investment opportunities in the identified sectors to the amount of R10 billion.
“This joint venture is a creative and practical mechanism by the private sector to look at large scale projects in agriculture, mining and infrastructure,” he said.
The two countries committed themselves to strengthening relations through closer and focused cooperation in areas such as infrastructure development, agriculture, mining and energy, tourism, arts and culture, transportation, environment, standards, amongst others.
The JEC also resolved to cooperate in promoting handicrafts and introducing the culture of both nations through the participation of folk groups in events held in both countries and establishing cultural weeks.