Pretoria — South Africa is fostering closer trade relations with Mozambique, which is one of the fastest growing economies in sub-Saharan Africa, says Trade and Industry Minister Rob Davies.
Speaking at the Mozambique Economic and Social Forum (MOZEFO) Conference in Sandton on Tuesday, Minister Davies said stronger trade relations with Mozambique will boost growth and add value to both countries.
Minister Davies said Mozambique is a strategic and important trading partner for South Africa.
"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 it in a way that is going to support the economic diversification and industrialisation of our countries," said the Minister.
Minister Davies said it is important for both countries to move away from being only producers of mineral commodities.
"Only by moving away from being proud producers of mineral commodities can we add value, move up the value chain and diversify our economies. It is the only way to raise the living standards of our people and promote greater economic inclusivity," he said.
The Southern African Development Community (SADC) is on a journey towards implementing the SADC Industrialisation Strategy. The region 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," said Minister Davies.
Both South Africa and Mozambique have been involved in a number of initiatives to promote greater economic contact and joint activities.
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 with Mozambique. This is part of the South African government's efforts to mobilise outward investments into the African continent by South African companies.
"At this stage, there are 35 foreign direct investment projects by South African companies in Mozambique, totalling an investment value of R122 billion. These investment projects have created over 11 000 jobs in Mozambique," said Minister Davies.
Both countries have established a number of government-to-government agreements to enhance trade and investment. Some of the ongoing work in this regard pertains to the 2005 Memorandum of Understanding (MoU) on Economic Cooperation, whicht needs to be reviewed and updated. The MoU, in particular, needs to cover new areas in investment, infrastructure and industrial development, said Minister Davies.
Meanwhile, 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 Minister 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.