South Africa and Saudi Arabia strengthen trade ties

SOUTH AFRICA – South Africa is determined to enhance the export of value-added goods and services to Saudi Arabia, reinforcing its commitment to a strong trade relationship.

Minister of Trade, Industry and Competition, Parks Tau, made this clear during the opening of the South Africa-Saudi Arabia Business Forum at the Sandton Convention Centre in Johannesburg on Monday.

“We must strive for a mutually beneficial trade relationship,” Tau stated, emphasizing the need for collaborative efforts between the two nations.

During his address, Tau announced a plan to consolidate several initiatives into a comprehensive action plan. “Over the next few weeks, we will take several initiatives and implement an action plan over the next two years,” he said.

“We will take direct responsibility for overseeing the implementation of this plan, ensuring that we deliver on these commitments.” This approach aims to institutionalize the relationship between the countries and ensure sustained progress.

The framework for these economic relations is grounded in the Joint Economic Commission, which includes the South Africa and Saudi Arabia Joint Business Council. “This council has cemented and strengthened our commercial and economic linkages,” Tau explained.

He highlighted the necessity of diversifying South Africa’s trade profile beyond a commodity-based relationship.

Trade between South Africa and Saudi Arabia has shown notable growth, with South Africa’s exports to Saudi Arabia increasing from USD 6.6 billion in 2022 to USD 8.1 billion in 2023.

However, the relationship remains skewed in favor of Saudi Arabia. “Our collective efforts over the years have shown notable growth in overall trade,” said Tau. “As a country, we want to enhance our export of value-added goods and services to Saudi Arabia.”

To achieve this goal, Tau stressed the need for increased cooperation in various sectors, including agro-processing, infrastructure, minerals beneficiation, services, technology, healthcare, automotive, and agriculture.

He urged Saudi businesses to explore investment opportunities in South Africa, noting that “just as Saudi Arabia is positioned as the gateway to the Middle East, South Africa serves as the gateway to a dynamic continent with great prospects.”

Tau encouraged South African businesses to seize the momentum of international investment. “Our opportunities for investment span sectors such as renewable energy, oil storage and refining, tourism, hospitality, and the ocean economy,” he added.

He expressed optimism about the future of trade relations between the two countries, citing the enthusiasm of both Saudi and South African businesses.

“I sincerely believe that the strong ties of goodwill between our countries will translate into significant economic gains,” he remarked.

South Africa exports various fresh produce to Saudi Arabia, although this accounts for less than 2% of the kingdom’s total agricultural imports.

Key exports include oranges, lemons, pears, grapes, mandarins, apples, plums, and avocados. These products form part of a broader effort to enhance trade relations and increase South Africa’s market share in Saudi Arabia.

As the two countries solidify their partnership, South Africa aims to improve its standing in the Saudi market and ensure that both nations benefit from their collaborative efforts in the years to come.

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE.