The Saudi Export-Import Bank has finalized a US$25 million credit agreement with South Africa’s Standard Bank Group Ltd to enhance trade between Saudi Arabia and the continent’s largest economy.
This partnership aims to promote the export of Saudi goods to Africa and “forge lasting connections,” said Naif Al-Shammari, deputy CEO of Saudi Exim, during a Saudi-South African Business Forum in Johannesburg on Monday.
Additionally, Saudi Exim signed a separate agreement with Absa Group, although further details were not disclosed.
As the oil-rich kingdom seeks to diversify its economy, it is actively investing in various African markets. Notably, Saudi Arabia’s Zahid Group is in discussions to acquire Barloworld Ltd, a distributor of Caterpillar Inc. equipment in Africa, according to Bloomberg.
Furthermore, ACWA Power, based in Riyadh, has signed a memorandum of understanding to invest US$10 billion in South Africa’s renewable energy sector over the next decade.
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Under the agreement with Standard Bank, Saudi Exim will offer funding to Saudi companies looking to invest in South Africa, as stated by Standard Bank Deputy CEO Kenny Fihla.
In 2023, Saudi Arabia ranked as South Africa’s 14th-largest trading partner, with investments totaling US$1.6 billion, making it the largest foreign investor in South Africa’s renewable energy sector.
South African Trade and Industry Minister Parks Tau emphasized the importance of boosting service exports to Saudi Arabia. The two nations plan to consolidate their investment and trade opportunities and develop a two-year action plan.
In 2023, South African shipments to Saudi Arabia rose by 23% year-on-year, reaching R8.1 billion. Tau noted the need for South Africa to enhance cooperation in value-added sectors such as agro-processing, minerals beneficiation, technology, and skills transfer.
