Saudi Export-Import Bank signed a $25 million credit agreement with South Africa’s Standard Bank Group Ltd. to facilitate trade between the kingdom and the continent’s largest economy.
The deal will support the export of Saudi Arabian goods to Africa and “build bridges that will last far beyond today,” Naif Al-Shammari, Saudi Exim’s deputy chief executive officer, said at a Saudi-South African Business Forum in Johannesburg on Monday. The trade-finance institution also signed an agreement with Absa Group Ltd., he said, without giving more details.
The oil-rich kingdom is seeking to diversify its economy and is among nations that are investing in the continent. Saudi Arabia’s Zahid Group is in talks to acquire Barloworld Ltd., an African distributor of Caterpillar Inc.’s equipment, Bloomberg reported in August, while ACWA Power, a Riyadh-based company, has signed a memorandum of understanding to invest $10 billion in South Africa’s renewables industry over the next decade.
As part of its agreement with Standard Bank, Saudi Exim will provide funding for companies from the kingdom that want to invest in South Africa, said Kenny Fihla, Standard Bank Group’s deputy CEO.
Saudi Arabia was South Africa’s 14th-biggest trading partner in 2023, data compiled by Bloomberg show. Its investment in the country amounts to $1.6 billion and it’s the largest investor in the country’s renewable-energy sector, according to the South African government’s news agency.
“As a country, we want to advance our export of services to Saudi Arabia,” said Parks Tau, South Africa’s minister of trade and industry. The two countries have agreed to consolidate their lists of investment and trade opportunities in the coming weeks and will formulate an action plan that will be carried out over the next two years, he said.
Shipments to the kingdom increased 23% year-on-year to 8.1 billion rand ($461.5 million) in 2023, Tau said.
