Ministers and Deputy Ministers,
As Salam Alaikum!
It is my singular honour to address you at this distinguished gathering during my inaugural visit to the Kingdom of Saudi Arabia.
We are grateful for the warm hospitality accorded to us during this visit and sincerely hope that we can reciprocate when you visit the beautiful shores of our country. South Africa and Saudi Arabia share a rich history, having established diplomatic relations in 1994.
The cornerstone of our economic relations is the South Africa-Saudi Arabia Joint Economic Commission, which is co-chaired by our respective Ministers of Trade and Industry. The seventh edition of the Joint Economic Commission took place in South Africa in 2016 and we look forward to building on the gains made at the forthcoming meeting, scheduled to take place in October later this year.
In taking forward the work of this Commission, our Department of Trade and Industry has been supporting visits by South African companies to Saudi Arabia with a view to increasing opportunities in this strategic market.
These efforts have begun to bear fruit with impressive growth in the overall trade relationship. South Africa’s exports to Saudi Arabia showed an increase from R2.6 billion in 2013 to R4.4 billion in 2017. Trade, however, still remains very much commodity based and skewed in favour of Saudi Arabia.
It is important as we strive for a mutually beneficial trading relationship to intensify cooperation in value-added sectors such as agro-processing, infrastructure, minerals beneficiation, services, technology and skills transfer, health care, automotives and aquaculture.
As the drivers of our commercial agenda, the onus is upon business to seek a more balanced trading portfolio.
We wish to applaud the significant investments that Saudi Arabia has made into South Africa over the years.
We would like to mention, in particular, the R5 billion investment by ACWA Power in the Bokpoort concentrated solar power plant in the Northern Cape. The project is one of the flagship concentrated solar thermal projects in South Africa and was launched in 2016 by our respective Ministers of Trade Industry.
Upon completion, this concentrated solar plant will have the largest level of thermal storage in the world. Much like Saudi Arabia, South Africa is largely dependent on fossil fuels for our energy generation.
The ACWA Power Plant has seamlessly integrated into our energy diversification efforts, forming part of our Renewable Energy Independent Power Producers Procurement Programme. Such has been the success of this initiative that ACWA Power will be undertaking a further investment in South Africa in the Eastern Cape.
This is a great demonstration of confidence in the South African economy and in the country as an attractive destination for significant investment. South Africa is a thriving democracy with an advanced and diverse economy, a sophisticated and well-regulated financial sector, and extensive transport, telecommunications and energy infrastructure. As Government, we are working hard to create a dynamic and enabling business environment that will promote greater productive investment in our economy.
Moody’s earlier this year revised South Africa’s economic outlook from negative to stable.
This upward revision is attributed to the decisive steps taken by our Government towards more predictable and transparent policies. This signals that South Africa’s macroeconomic and political fundamentals are in place, reinforcing our position as a credible investment destination.
It is within this context that we have embarked on this visit to Saudi Arabia to convey the message that South Africa is open for investment. We invite our Saudi friends to follow the lead of the many Saudi companies that have already invested in the country.
Understanding that the key to economic growth and job creation lies in much greater levels of investment, South Africa has recently embarked on an ambitious investment drive, which aims to raise $100 billion in new investment over the next five years.
We will be hosting an Investment Conference later this year, to which we are inviting investors from within South Africa, from across the African continent and from countries across the world.
We have appointed four special envoys on investment, who have begun the task of representing the President of South Africa in engagements with potential investors.
As part of the investment drive, we are intensifying efforts to improve the business environment.
We have put in place a very attractive package of incentives administered by Invest SA within the Department of Trade and Industry. This institution has been established to assist potential investors in identifying opportunities and facilitating a seamless investment process.
We have officials from Invest SA present here today, who are available to address any queries you may have and to assist in taking these discussions forward. Aligned to our investment drive, eight special economic zones have been designated in different parts of the country, each with their own particular advantages and focus.
These SEZs are Saldanha Bay, Richards Bay, Dube Trade Port, Coega, Maluti-a-Phofung, Musina and OR Tambo. Companies that invest in SEZs benefit from a reduced corporate tax rate and the employment tax incentives. The support measures that South Africa offers in these SEZs are comparable to our global competitors, if not better.
In addition to the myriad investment opportunities in South Africa, the African continent is equally endowed with initiatives that provide some of the highest returns on investment globally. The imminent establishment of an African Continental Free Trade Area, to which 49 African countries have already signed up, offers investors a market of over 1 billion people and a combined GDP of $2 trillion.
As the most industrialised economy on the African continent, South Africa provides an ideal gateway into this vast continental market.
As I conclude, I am encouraged by the enthusiasm of Saudi and South African businesses.
I sincerely believe that the strong ties of goodwill between our countries will indeed translate into economic gains for all our people. As the South African government, we remain committed to creating a business environment that is conducive towards supporting trade and investment.
As we celebrate the centenary of the birth of our founding President Nelson Mandela, we are aware of the responsibility we have to realise his vision of global peace, prosperity and equality. We are aware that it is only through effective and meaningful partnerships between countries like Saudi Arabia and South Africa that we will be able to advance this cause.
We look forward to welcoming you to South Africa to participate in the Investment Conference and to see for yourself the great opportunities that South Africa has to offer.
Shukran! I thank you!