SA KEEN TO STEP UP EFFORTS TO BALANCE THE TRADE DEFICIT WITH SAUDI ARABIA – DAVIES

SA KEEN TO STEP UP EFFORTS TO BALANCE THE TRADE DEFICIT WITH SAUDI ARABIA – DAVIES

By BRIAN KAJENGO

 The Minister of Trade and Industry, Dr Rob Davies said that total trade between South Africa and Saudi Arabia has more than doubled from R29.7billion in 2009 to R80.1 billion in 2013.

Minister Davies was speaking at the 5th session of South Africa – Saudi Arabia Joint Economic Commission (JEC) that was held on 20 Thursday, March at the CSIR International Convention Centre. He stated that this is an increase of 17.62% on our total trade of R 68.1 billion recorded in 2012.

 Minister Davies added that this imbalance in our trade relations has added to a huge trade deficit which grew to R74.8 billion in 2013 from R 62.2 billion in 2012. He emphasised that

“South Africa is keen to step-up efforts to reduce this huge trade imbalance, especially in value added exports.

 “There is no doubt that the level of our bilateral trade, especially South Africa’s value added exports to Saudi Arabia is far below potential and is also concentrated in a few sectors like oil and gas, raw materials, fruits and vegetables. This point to a need to diversify our basket of good traded. More value added and diversified trade will benefit both our countries as it will lead to job creation, which is one of our biggest challenge at present,” said Minister Davies.

 He further said that South Africa commands political and economic influence to Africa whilst Saudi Arabia is of big influence in the Middle Eastern region.

“What ties our two economies, other than just historical ties, is our endowment of natural resources. Saudi Arabia has the biggest reserves of oil and remains the biggest oil supplier to the world over, including to South Africa. In Turn South Africa is also very rich in mineral reserves. It is exactly against this mutual resource advantage that both our countries have taken a conscious decision to diversify our economies to various other sectors,” he added.

 The JEC was preceded by the South Africa-Saudi Arabia Business Forum, that attended by business people from both countries. The Forum mandated the South Africa–Saudi Arabia Business Council to identify complementary projects they will collaborate on.

 The Joint Economic Commission (JEC) co-chaired by Minister Davies and his Saudi Arabia counterpart, Dr Twafeeq Al Rabeeach. It’s an initiative agreed upon between the two countries in order to strengthen economic ties, to attract foreign direct investment from Saudi Arabia into South Africa in targeted sectors and to promote sound business-to-business cooperation.

 In January this year, Saudi Arabia overtook Germany to become South Africa’s 2nd largest source of imports, with China being the biggest.