Johannesburg - The trade ministers from South Africa and Saudi Arabia on Monday signed a Memorandum of Understanding (MoU) establishing the South African - Saudi Business Council.
The MoU signed between Business Unity South Africa (BUSA) and the Saudi Chambers of Commerce creating the council is aimed at improving two-way trade and investment relations.
South African Minister of Trade and Industry Mandisi Mpahlwa said the establishment of the council is a major milestone in relations between South Africa and the Middle Eastern economic powerhouse.
"Today is very important in the ongoing and growing relationship between South Africa and Saudi Arabia.
"There is a growing trend in trade, but the important element will now be to grow trade and investment both ways.
"The council is an important opportunity to do this because both countries are currently involved in major infrastructure development projects," Mr Mpahlwa said.
Saudi Arabia relies heavily on oil as its sole export and is looking to diversify its economy, Mr Mpahlwa explained, adding that interest has been expressed in agro-processing, construction, fishing, chemicals, boat building, electronics and mining.
Trade between developing countries such as South Africa and Saudi Arabia must continue even during tough times in order to give the global economy a better chance for an early recovery, Mr Mpahlwa said.
South Africa needs to look at exploiting certain needs in the Saudi market, and should perhaps grow certain agricultural products that are in demand in that country.
The MoU highlighted agriculture and the mining sectors as areas for closer cooperation in the future.
"Today is a milestone in the relationship of South Africa and Saudi Arabia during a very difficult time in world at the moment.
"It is extremely important that we don't only have this strategic relationship, but that we build on it and the council will concretely cement business relations which are needed," Saudi Minister of Commerce and Industry Abdulla Ahmed Zeinal Ali Reza said.
Mr Reza highlighted that Saudi Arabia will be investing in agriculture not only in South Africa but in four other African countries in order to teach effective crop growing techniques as well as transfer valuable skills.
Food security is vital, Mr Reza said, highlighting that Saudi farmers have managed to establish special techniques for growing more maize per hectare, and that Saudi has a lot to offer the world in the agricultural sector.
Saudi Arabia will be transferring skills and helping African farmers utilize land more effectively, Mr Reza said.
"We look at Africa not only as a place where products can be harvested, but we look at making Africa a partner in fight for food security.
"We have so far received great interest from African countries," Mr Reza said.
Trade between South Africa and Saudi Arabia has been growing significantly with South African exports almost doubling from R1.256 billion in 2003 to R2.4 billion in 2007.
Imports from Saudi Arabia also increased from R15.049 billion in 2003 to R25.3 billion in 2007.
Oil remains the most prominent product imported from Saudi Arabia and is the main reason for the R22.9 billion trade deficit in favour of Saudi Arabia.
