Trade, Industry and Competition Minister, Ebrahim Patel, has opened the 9th session of the South Africa-Saudi Arabia Joint Economic Commission (JEC) and the South Africa-Saudi Arabia Trade and Investment Forum in Pretoria.
The forum aims to provide South African and Saudi Arabian companies with a strategic platform to engage on bilateral trade and investment opportunities in both markets, while simultaneously affording them access to senior decision-makers and stakeholders.
Patel told the forum – which was attended by delegations of business people from both countries – that South Africa presents an array of investment areas, from manufacturing to pharmaceuticals.
“South Africa is a strong value proposition for investments from many parts of the world. Last year, the Ford motor company decided to invest $1 billion in expanding the auto production plant in South Africa. The decision led, in turn, to 10 large component suppliers of Ford deciding to bring their investments to South Africa.
“Last October, we launched the new Toyota Corolla Cross – the first hybrid vehicle produced at commercial scale on the African continent. Mercedes Benz rolled out the new C-Class series produced locally. Aspen… has been producing the J&J COVID-19 vaccine in South Africa.
“I raise these examples… to show the capability in the South African market, ranging from advanced manufacturing to industrial innovation. To scale these up, we look for partnerships, investment partnerships from Saudi businesses.
“I will be finalising discussions with my counterpart on a joint investment fund that we hope to announce at the time of the planned State visit,” he said.
Patel said South Africa presents opportunities for investors to reach other markets through the country.
“South Africa has a free trade deal with the European Union and the United Kingdom, and we have duty-free access for a large number of products to the United States market. We are busy completing the African Continental Free Trade Area, which will be a large free trade agreement knitting together some 54 African countries.
“When you invest in South Africa, you are investing in an opportunity to reach that much wider market,” he said.
The Minister said although South Africa and Saudi Arabia maintain strong trade links, it is important to bring more balance to the trade surplus between the two countries.
In 2021, trade between South Africa and Saudi Arabia stood at R66.15 billion.
South African exports stood at some R5.54 billion, with imports from Saudi Arabia amounting to at least R60 billion.
“We want to focus on improving trade and investment links [between the two countries], so that we can increase [exports and imports] further.
“Saudi Arabia has a trade surplus with South Africa due to its large oil exports. We can help to improve the trade balance with greater manufacturing and food product exports both to the Saudi market and using Saudi as a… gateway for exports to the rest of the Middle East.
“We can buy more fertilisers, as well as the derivatives of petroleum products. We see an opportunity for significant new investment from Saudi Arabia in a number of South African value chains in manufacturing, in hotels, and entertainment, working through joint ventures and with the investment fund that the two governments are working on,” he said.