South Africa and Mozambique strengthening trade relations to boost growth and add value
South Africa is fostering closer trade relations with Mozambique to accelerate and strengthen economic and trade relations to boost growth and add value to both countries, Minister of Trade and Industry, Dr Rob Davies said.
According to Minister Davies, Mozambique is one of the fastest growing economies in sub-Saharan Africa and features as a strategic and important trading partner for South Africa. He said that trade relations between the two countries are very close, underpinned by the growing ties in trade and investment.
“We are partners in this journey towards continental and developmental integration. As we create a larger regional market eventually culminating in a continental market, we have to do this in a way that is going to support economic diversification and industrialisation of our countries. Only by moving away from being proud producers of mineral commodities, can we add value, move up the value chain and diversify our economies because it is the only way to raise living standards of our people and promote greater economic inclusivity,” said Davies.
Davies said that the Southern African Development Community (SADC) is on a journey towards the implementation of the SADC Industrialisation Strategy and has to come up with an implementable industrial action plan.
“As we work on regional integration and diversification of our economies, infrastructure development is critical in areas such as energy, power, transport and the improvement of urban infrastructure. These are all central pillars to us promoting developmental integration,” added Davies.
Davies added that both countries have been involved in a number of initiatives to promote greater economic contact and joint activities. He said that South Africa has taken a number of trade missions to Mozambique and regularly exhibits at the Maputo International Trade Fair (FACIM) to facilitate a stronger economic relationship between the two countries.
“As the South African government, we are also mobilising outward investments into the African continent by South African companies. At this stage, there are thirty-five foreign direct investment projects by South African companies in Mozambique, totalling an investment value of R122 billion. These investment projects have created over eleven thousand jobs in Mozambique,” stated Davies.
Davies mentioned that both countries have established a number of government to government agreements that seek to enhance trade and investment. Some of the ongoing work in this regard pertains to the 2005 Memorandum of Understanding (MoU) on Economic Cooperation that needs to be reviewed and updated. In particular, it needs to cover new areas in investment, infrastructure and industrial development.
Trade Invest Africa and the Development Bank of South Africa (DBSA) undertook a joint technical mission earlier this year to Mozambique to scope for investment led trade opportunities and investment projects in infrastructure.
“At a business level, we continue leading outward investment missions from South Africa to Mozambique and have a number of potential investments all at various stages of elaboration. As our continent begins to industrialise and move up the value chain, the profile of trade will change dramatically. There will be opportunities for us to enhance the value of our trade,” said Davies.
Trade Invest Africa is a Division of the Department of Trade and Industry whose mandate is to facilitate outward investment by South African companies into the rest of Africa.