South Africa to maintain strong ties with UAE

DUBAI — South Africa is proud of its relationship with the UAE, and is looking forward to enhancing it even further through more investments, regular diplomatic visits between its officials and boosting cooperation across multiple sectors, its top diplomat to the UAE revealed.

By Alvin R. Cabral

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Published: Sat 17 Sep 2011, 10:57 PM

Last updated: Tue 7 Apr 2015, 5:50 AM

Speaking exclusively to Khaleej Times, Ambassador Jacoob Abba Omar said that South Africa’s ties with the Middle East, especially the UAE, have grown “in leaps and bounds,” citing over 200 South African businesses operating in the country spanning various industries.

He specifically singled out Dubai as an ideal hub for doing business: “Without a doubt, it is good to do business in Dubai. As someone remarked, ‘the global economy is shifting from the West to the East, and ths shift is passing through Shaikh Zayed Road.’”

“The stability being enjoyed here (in Dubai) continues to encourage South African companies to come and set up shops, invest and work here.”

“And as the UAE has been so welcoming to South African businesses, so too is South Africa to the UAE,” he added. The UAE remains South Africa’s largest trade partner in the region, with total bilateral trade at almost $2 billion.

The UAE is South Africa’s 21st largest export market and its sixth highest supplier of oil. Fast-moving consumer goods to the UAE continue to dominate South Africa’s exports, whilst oil is the biggest import.

South Africa is currently the 27th largest economy in the world with a GDP of $354 billion according to the International Monetary Fund.

Omar said that the countries’ relationship is active and visible, from close political cooperation to building stronger educational, scientific, defence, trade, investment, tourism and sports links. Excerpts from the interview:

How is South Africa’s relationship with the Middle East, especially with the UAE and Dubai?

Since President Nelson Mandela took office in 1994, our relationship with the Middle East has grown in leaps and bounds. Currently we have missions in Ramallah, Tehran, Amman, Jordan, Damascus, Riyadh and Jeddah, Kuwait, Doha, Muscat, Dubai and Abu Dhabi. Mr Mandela undertook a state visit to the region during his presidency, which heralded a new era of close ties between the two nations.

South Africa President Jacob Zuma is planning a state visit to the UAE in the near future. His predecessor, Thabo Mbeki, as well as Mr Mandela visited the region during their tenures. Various other ministers regularly visit the region. Similarly, several UAE VIPs have visited South Africa, both on official business and on personal visits, and have come back as endorsers of the Rainbow Nation.

What strategies are you employing and are planning to further boost these ties? How can you lure investors to South Africa?

As far as trade is concerned we use a combination of methods: we encourage and support a number of South African companies to exhibit in the vast number of trade exhibitions hosted in the UAE. South Africa takes part in exhibitions including Gulfood, Automechanika and Gitex, to name a few.

By showcasing our companies we showcase our strength in terms of what sectors and sub-sectors South Africa is strong in and therefore this further increases bilateral trade. We further add support by encouraging UAE companies to undertake inward buying missions to South Africa, like the African Big 7.

Sending these companies to South Africa will also advise UAE companies as to the advantage of trading with South Africa. We also send a number of inward investment missions to South Africa to highlight the advantages of investing in it. Some of the benefits include world-class infrastructure, sophisticated financial markets, effective business tax rate, etc. Investors usually arrive at their decisions by being impressed with the returns they achieve. The key sectors for investment in South Africa for the UAE market would be agro processing, automotives, tourism and mining.

Do you have any upcoming investment plans in the Middle East?

We have several delegations coming to the UAE over the next few months while we are working on sending another investment delegation to South Africa. This would be a follow up to the delegation led by Abu Dhabi Department of Economic Development Chairman Nasser Al Suwaidi, which included the Abu Dhabi Investment Authority, Mubadala and the Abu Dhabi Fund for Development.

Various high-ranking South African Ministers regularly visit the UAE to strengthen trade and economic between the nations.

What industries are South Africa’s focal points?

Africa is set for a renewable energy boom, and investment in renewable power is set to grow from a total of $3.6 billion in 2010 to $57 billion by 2020, accompanied by huge foreign direct investment in energy infrastructure.

South Africa offers mining investors huge growth potential and proven economic and political stability. The mining industry has been the foundation for economic development in the country for well over a century. In 2009, the mining industry contributed more than 30 per cent to the country’s total export revenue, and employed nine per cent of the country’s economically active population. Our country continues to host significant known reserves of mineral commodities, with almost 60 minerals being actively mined.

South Africa has a broad and well-developed agricultural sector which is attractive to those nations faced with food security issues. Exports of corn (maize), wool, sugar, peanuts (groundnuts), tobacco, and other farm products are all high and significant for the Middle East. Farming has been deregulated since the 1980s, and the agricultural sector has since responded well to free market conditions — much of the fresh produce you see in UAE stores is from South Africa.

South Africa is fast catching the attention of the global community as a serious investment destination. India and China have turned to Africa in their search for energy resources to power their fast-paced economies, but while China prefers government-to-government deals, Indian investment is mainly in the private sector, notably in telecom, pharmaceuticals and manufacturing.

Global car manufacturers have invested billions in the SA automotive sector. For example, it is a global hub for Ford’s diesel engines, and every C-Class Mercedes Benz around the world was made in South Africa.

What is your perception of the present economic climate?

The one lesson I have learnt is that the best time to do marketing is when there is a climate of uncertainty. No part of the world has been spared by the global uncertainties. That has not stopped us from continuing to appeal to Emirati investors to do business in South Africa. It has sound fundamentals to appeal to investors, including a stable democracy, transparent system of governance, and can boast prudent fiscal policies and a strictly regulated financial sector.

Its growing economic influence gives it the power of influential mediator within the African continent, as a nod to its gateway to the continent status. Not only is it a gateway, it is a leader. South Africa is the single largest investor on the African continent – a continent boasting the biggest investment growth opportunities.

South Africa is a globally competitive business destination. It has improved its ranking in the 2011 World Economic Forum’s latest Global Competitiveness Index, climbing four places to 50th out of 142 countries surveyed, while claiming top spot for regulation of exchanges and second place for soundness of banks.

Not only is it competitive, it is booming. The country’s growth outlook is “highly promising,” according to Bank of America Merrill Lynch in a report on countries in Europe, the Middle East and Africa. SA growth is being driven by government infrastructure investment and strong consumer spending.


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