Saudi Arabia and South Africa have signed a Memorandum of Understanding (MoU) establishing the South African-Saudi Business Council. The agreement, signed by the trade ministers of the two countries in Johannesburg on Monday, is aimed at improving bilateral trade and investment relations. South African Minister of Trade and Industry Mandisi Mpahlwa said the establishment of the council is a major milestone in relations between South Africa and Saudi Arabia. “Today is a very important day in the ongoing and growing relationship between South Africa and Saudi Arabia. There is a growing trend in trade, but the important element will now be the growth of trade and investment both ways,” he said in information made available to Saudi Gazette here on Tuesday. “The council can play an important role in trade and investment because both countries are currently involved in major infrastructure development projects,” he added. “Today is a milestone in the relationship of South Africa and Saudi Arabia during a very difficult time in world. It is extremely important that we build on this strategic relationship and use the council to cement business relations that are needed,” Saudi Minister of Commerce and Industry Abdulla Ahmad Zainal Alireza said. Mpahlwa said that Saudi Arabia relies heavily on oil as its sole export and is looking to diversify its economy. He added that interest has been expressed in agro-processing, construction, fishing, chemicals, boat building, electronics and mining. “Trade between developing countries such as South Africa and Saudi Arabia must continue even during tough times in order to give the global economy a better chance for an early recovery,” he stressed. “South Africa needs to look at exploiting certain needs in the Saudi market, and should perhaps grow certain agricultural products that are in demand in that country,” he said. The MoU highlighted agriculture and the mining sectors as areas for closer cooperation in the future. Alireza said that Saudi Arabia will be investing in agriculture not only in South Africa but in four other African countries. He explained that food security is vital, and added that Saudi farmers have managed to establish special techniques for growing more maize per hectare, and that the Kingdom has a lot to offer the world in the agricultural field. “Saudi Arabia will be transferring skills and helping African farmers utilize land more effectively. We look at Africa not only as a place where products can be harvested, but we look at making Africa a partner in the fight for food security. We have so far received great interest from African countries,” he said. Trade between South Africa and Saudi Arabia has been growing significantly with South African exports almost doubling from SR1.256 billion in 2003 to SR2.4 billion in 2007.Imports from Saudi Arabia also increased from SR15.049 billion in 2003 to SR25.3 billion in 2007. Oil remains the most prominent product imported from Saudi Arabia and is the main reason for the SR22.9 billion trade deficit in favor of Saudi Arabia.
