Saudi-South African deal: Saudi Exim Bank and Standard Bank Group sign $25 million credit agreement to strengthen trade relations at a business forum in Johannesburg

The Saudi-South African Business Forum witnessed the signing of a significant $25 million credit agreement between the Saudi Export-Import (EXIM) Bank and South Africa’s Standard Bank Group. This deal, designed to enhance trade relations between the two nations, was one of several initiatives unveiled at the forum held in Johannesburg. The event, attended by over 420 business leaders and government officials, aimed to strengthen economic partnerships with a particular focus on the mining sector.

Naif Al-Shammari, Deputy CEO of Saudi EXIM, emphasised the importance of the agreement, noting that the additional funding will provide Saudi companies with the financial support they need to expand their exports to South Africa. The deal signals a key moment in the growing trade relationship between the two countries, which reached an estimated $3.5 billion in 2023. Al-Shammari expressed optimism that the agreement would further solidify the partnership, creating new opportunities for businesses on both sides.

Beyond the credit deal, a memorandum of cooperation was also signed between the Saudi Export Development Authority and Skytower Development Co., further highlighting the collaborative efforts to enhance trade links. These initiatives align with Saudi Arabia’s broader strategy to deepen its economic ties with African nations, a priority outlined by Crown Prince Mohammed bin Salman during the Saudi-African Summit held in Riyadh last November.

Boosting Saudi-South African Cooperation

The forum, organised by Saudi Arabia’s National Competitiveness Center (NCC) in collaboration with the Federation of Saudi Chambers and South Africa’s Ministry of Trade and Industry, showcased the deepening relationship between the two countries. Leading the Saudi delegation was Minister of Commerce Majid bin Abdullah Al-Qasabi, who also serves as the Chairman of the NCC. His presence underscored the importance of expanding economic cooperation in light of the Kingdom’s Vision 2030 ambitions, which focus on economic diversification and boosting non-oil revenues.

One of the forum’s key panels focused on cooperation within the mining sector, an area seen as ripe for collaboration. South Africa, with its wealth of mineral resources, offers significant opportunities for Saudi investment, while the Kingdom is keen to leverage its own mining potential as part of its broader economic reforms. Another panel explored the growing business partnership between the two nations, with officials discussing the mechanisms needed to resolve obstacles faced by the private sector, ensuring smoother operations for companies involved in cross-border trade.

Saudi Competitiveness on the Rise

During the forum, Iman bint Habas Al-Mutairi, Vice Minister of Commerce and CEO of the NCC, delivered a presentation outlining the Kingdom’s ongoing economic reforms aimed at improving its global competitiveness. Since 2016, Saudi Arabia has implemented more than 820 reforms across nine key sectors, driven by 65 different government entities. These changes have helped position Saudi Arabia as a prime destination for international investment and entrepreneurship.

Al-Mutairi also highlighted the legal and regulatory improvements that have been put in place, noting that around 1,200 regulations and laws have been either updated or introduced. These reforms have bolstered the business environment by reducing bureaucracy and making it easier for companies to set up and operate in the Kingdom. For example, Saudi Arabia now allows 100 per cent foreign ownership in most business sectors, a significant move designed to attract more international businesses.

A key component of this effort has been the establishment of the Saudi Business Center, which has streamlined business processes by reducing licensing requirements by 55 per cent. These reforms are part of the broader Vision 2030 strategy, aimed at transforming the Kingdom’s economy and reducing its reliance on oil revenues.

Strengthening Economic Ties

In addition to the credit agreement, the forum served as a platform for high-level discussions between Saudi and South African officials. Minister Al-Qasabi held talks with several South African ministers, including Parks Tau, Minister of Trade, Industry, and Competition; Stella Ndabeni-Abrahams, Minister of Small Business Development; Patricia de Lille, Minister of Tourism; and John Steenhuisen, Minister of Agriculture.

These discussions centred on how to further strengthen trade relations and explore new business opportunities in both countries. Key topics included the facilitation of trade in goods and services, as well as the participation of South African companies in upcoming events like the Biban24 forum, which aims to promote small- and medium-sized enterprises (SMEs). Both nations are keen to boost collaboration in areas of common interest, particularly in sectors like tourism, agriculture, and SMEs, where there is ample potential for growth.

Minister Al-Qasabi also took part in the inauguration of SMSA Express’s operations centre in South Africa, which will provide logistical support for businesses operating between the two countries. This development reflects Saudi Arabia’s growing commitment to enhancing its presence in Africa and underscores the importance of logistics in facilitating smoother trade flows.

Looking Ahead

The Saudi-South African Business Forum represents a significant step forward in the economic partnership between the two nations. As Saudi Arabia continues to expand its global trade networks under Vision 2030, Africa is set to play an increasingly important role in its strategy. The $25 million credit agreement with Standard Bank Group marks just the beginning of what both countries hope will be a fruitful and enduring relationship.

As Saudi Arabia builds on its robust economic reforms and strengthens ties with African nations, opportunities for businesses in both regions are set to grow. With forums like this providing a platform for meaningful collaboration, the Kingdom’s ambitious plans for economic diversification and global competitiveness are beginning to bear fruit.