Saudi Arabia’s government has promised to invest over US$10 billion in South Africa in order to improve its failing economy. The investment will focus largely on the country’s energy sector, including building new oil refineries within the country.
President Cyril Ramaphosa was on a state visit to Jeddah, Saudi Arabia on Thursday, July 12, 2018 when King Sheik Salman bin Abdulaziz made this known while receiving him and his entourage. The visit was part of the president’s move to attract foreign investors to invest in the country’s unstable economy.
The South African Presidential Spokesperson, Khusela Diko told newsmen that the pledge was made by the Saudi Crown Prince Mohammed bin Salman during the visit by Ramaphosa and some government ministers to the oil-producing nation.
“Most of it will be in the energy sector – including building refineries, petrochemicals and renewable energy,” said Khusela Diko.
The meeting between the two national leaders was also announced in a tweet by the South African government official handle. “President Ramaphosa meeting with the Crown Prince Mohamed bin Salman at the Al James Main Guest Palace in Jeddah. Saudi Arabia pledges to invest $10 billion in South Africa,” the tweet read.
Ramaphosa’s economic pilgrimage
Experts have said this cannot be disconnected from the growing anger across the country over the increase of petrol prices which is now R16 per litre in some parts of the country. According to analysts, this resolution by both parties will address the current situation in the country because South Africa imports 47 percent of its oil from Saudi Arabia. The South African president also urged Saudi to raise oil production so as to reduce the increasing oil prices in the world market.
This new development comes shortly after Ramaphosa’s visit to Nigeria to discuss economic relations with its president, and he is expected to be in the United Arab Emirates, another oil-producing state today, where he will be meeting with Sheikh Mohammed Bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi.
Since his assumption into office as the president of the country, Cyril Ramaphosa has injected new life into the country’s dwindling economy that suffered massive knock during the 9 years reign of the previous administration headed by Jacob Zuma. He inaugurated a team of five financial experts to market South Africa and attract new investors.
In June last year, reports revealed that the South African economy had plunged into the pool of recession for the first time in eight years. Statistics available showed that the country’s economy had shrunk by 0.7 percent in GDP for the first quarter of 2017. These statistics also showed how the major industries that contributed to the country’s recovery from recession in 2009 failed to salvage the economy last year.
Building a strong economy that will attract foreign investments to the country became some of President Cyril Ramaphosa’s important messages to South Africans when he assumed office in February 2018. Later in April, the president vowed to raise US$100 billion in the next five years as part of the move to safeguard the country’s dwindling economy after a year of recession.
He revealed his plan to spearhead the push to poach investors and attracts US$100 billion in investment to the country in his maiden state broadcast. He also reshuffled the cabinet and entrusted his team of financial experts with the task of selling the country to investors ahead of an investment conference later in the year.
“South Africa is an investment destination with significant unrealized potential,” Ramaphosa said while revealing his economic recovery team in April, while reassuring the people that the action was taken as a result of the potential results his administration is seeing as regards the economic situation of the country.
“Economic conditions in our country are changing. We are encouraged by the growth in business confidence over the last few months, the strengthened rand and improved growth estimates,” he said.
His three-country visit to oil producing countries has been seen as a major boost to his administration’s relentless effort to reduce oil prices which continue to rise in the country and also attract more foreign investors.