By Lehlohonolo Lehana.
South Africa and Saudi Arabia have committed to boosting trade between the two countries as part of efforts to grow their respective economies.
President Cyril Ramaphosa and Minister of Trade, Industry, and Competition Ebrahim Patel have been leading ongoing engagements between South Africa and Saudi Arabia – which have since resulted in local businesses finding a foothold in the vast Saudi Arabia market.
In 2023, South Africa’s exports to Saudi Arabia increased to R7.3 billion from R6.6 billion in 2022, while imports from Saudi Arabia decreased to R54.6 billion in 2023 from R73.6 billion in 2022.
The exported goods include agricultural products, motor vehicles, and basic chemicals, whereas the import items mainly consisted of refined petroleum and related products and crude oil.
Speaking at a press briefing in honour of the visiting Saudi business delegation, Co-Chair of the South African–Saudi Arabia Business Council, Stavros Nicolaou, underscored the need to increase trade and investment.
“From my vantage point, the Saudi Arabia market presents enormous growth opportunities for South African companies looking to expand their businesses in the gulf region as shown by local companies that are slowly establishing a presence in that region,” Nicolaou said.
Also speaking at the same media briefing, Dr Hisham Al Amoudi, Vice-Chairman of the Saudi–South Africa Business Council, reaffirmed Saudi Arabia’s commitment to investing in South Africa.
Al Amoudi said the South Africa and Saudi Arabia Joint Economic Commission and the Business Council was a good platform to further progress and boost inward investments between the two respective countries.
He said Saudi Arabia is committed to increasing investment across various sectors in South Africa.
“We are committed to increasing investments for mutual benefits and supporting South Africa’s economic growth. Our current investments contribute to South Africa’s Gross Domestic Product,” Al Amoudi said.
The visit by the Saudi business delegation aims to not only strengthen current trade relations but also to explore opportunities for South African companies to increase market access with products that have high export potential to Saudi Arabia.
In August 2023, Saudi’s Food and Drug Administration lifted prohibition on South African meat imports for the first time in 20 years following an outbreak of foot and mouth disease.
Karan Beef, one of South Africa’s biggest meat producers, will be one of five local meat producers to access Saudi Arabia’s $2bn meat market.
Karan Beef director Matthew Karan said the firm had been negotiating for this deal for a number of years and nothing had happened until Ramaphosa’s State Visit to Riyadh in 2022.
He said final approvals to start shipments of halaal cuts to the Kingdom of Saudi Arabia were now in place.
“I truly believe that if it wasn’t for that State Visit, and if it wasn’t for face-to-face discussions, we would have never been able to get the Saudis to open for us,” Karan said. “The plan is to start exports in the coming weeks.”