South Africa is interested in the region’s booming market of Islamic sukuk and will actively consider it in its business expansion plan with the Gulf Cooperation Council (GCC) countries, South African Minister of Trade and Industry Mandisi Mpahlaw said in Dubai on Sunday.
“The configuration of world power is changing and attempts to establish better ties with the GCC countries is a recognition of that transformation,” the minister said during a visit to the Gulf Research Center (GRC) to discuss potential areas of furthering economic cooperation between the GCC countries and South Africa.
“From historic relations with the United States and the Euro zone, South Africa’s business relations have expanded Africa, Southeast Asia and the GCC region,” Mpahlaw said.
As part of a two-day trip to the UAE to further bilateral business ties, the minister – who is leading a team of delegates from at least 25 leading South African companies – signed three major trade agreements with the UAE, including the avoidance of double taxation and fiscal agreement, the economic, trade and technical agreement and the promotion and reciprocal protection of Investment.
The GRC, in its capacity as an independent think tank, pointed out to the minister that only one percent of the GCC trade is with South Africa, which has run a trade deficit with most of the countries in the Gulf region for the last 10 years. In 2004, the GCC exports to South Africa stood at $2.9 billion, with oil from Saudi Arabia constituting a large part of it. The GCC imports from South Africa stood at $696 million. The UAE headed the GCC importer list with gold being the top commodity.
The delegation was briefed that in terms of economic challenges, both the GCC countries and South Africa share the common problem of dealing with growing unemployment. “Both economies are also trying to move away from the primary sector activities, to tertiary sectors such as knowledge-based services and tourism,” the GRC said in its recommendations.
Among the other areas of trade identified for possible consideration to further GCC-South African commercial relations were the minerals, petrochemicals, stock markets, and real estate sectors. It was also suggested that South African companies could attract GCC capital by way of issuing Islamic bonds, which are extremely popular with GCC investors.
The South African delegation will visit Bahrain next as part of the African country’s plan to give Gulf traders and investors a closer look at the business, tourism, investment and industrial opportunities South Africa has on offer.
