South African Minister of Trade and Industry, Dr Rob Davies, and Cuban Ambassador to South Africa, Angel Villa, have signed an agreement to implement the R350 million Economic Assistance Package offered to Cuba by President Jacob Zuma during the State Visit to Cuba on 6 December 2010. The agreement was signed in Pretoria today.

The agreement is divided into three facilities. Minister Davies says that Facility A consists of R40 million grant for the purchase of seeds by Cuba.

‘R5 million of this grant shall specifically be used to purchase seeds in the South African market, and the remainder of R35 million may be used for the purchase of seeds from any other country including RSA. This grant is aimed at providing important support for Cuba’s programme to achieve food security, and Department of Agriculture, Forestry & Fisheries is responsible for implementing the facility on seeds’ said Davies.

Facility B of the agreement of US$14 million (R100 million) solidarity grant which may not be paid to South Africa.

Facility C consists of R210 million for credit lines in two tranches of R70 million and R140 million. Minister Davies added that the credit lines are a loan to Cuba, which is expected to be repaid to South Africa.

‘R70 million shall be made available to Cuba immediately after entry into force of the Agreement and Tranche B, R140 million, shall be made available to Cub upon repayment of R70 million of the 1st Tranche (capital amount and interest thereto) has been fully repaid by back to South Africa’ stated Davies.

The Industrial Development Corporation would manage the package on behalf of the dti and will also pay all exporters on behalf of Cuba such that no funds will leave South Africa but it will remain in an account designated for the purpose.

Minister Davies has stressed that all costs related with facilitating and implementing the Economic package will be financed through the R350 million, which is the amount approved by Cabinet.

Speaking the signing, Ambassador Villa said the agreement is important for Cuba as it coincide with the 50th anniversary of the US imposing sanctions to them. Villa also said that three business forums took place between South Africa and Cuba with an intention of exploring business opportunities. He added that these included Business Unity South Africa and the African National Congress’s Progressive Business Forum.

The signing of the agreement is a culmination of efforts to strengthen trade relations between South Africa and Cuba.