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Saudi Arabia to invest R133 billion in South Africa

President Cyril Ramaphosa during the Launch of Public Service Month at Maponya Mall in Soweto. Gauteng Province. South Afirca. 31/08/2014. Photo: Siyabulela Duda / GovernmentZA'

President Cyril Ramaphosa has been approaching multinational investors since beginning his term in office. The plan; secure $100 billion in foreign investment to boost the country’s flailing economy. Now Cyril has received the boost he needed from Saudi Arabia.

The quest seemed ambitious, maybe even implausible, but the naysayers are going to be left slightly silenced following the latest Middle Eastern developments.

King Salman bin Abdulaziz al Saud has vowed to invest $10bn (about R133bn) into the South African energy sector, with focus on power creation through renewable energy.

Fin24 reported the breaking news earlier today, amid president Ramaphosa’s busy international conference roster. The South African head-of-state arrived in the Middle East on Thursday following his time in Nigeria, where he held discussions relating to a lucrative intra-African trade agreement.

Saudi Arabia, South Africa’s strategic partner in the Middle East

Almost half of all South Africa’s oil is imported from Saudi Arabia, with the government considering Saudi Arabia to be the country’s major strategic partner in the Middle East.

The total trade between the two countries totalled R56 billion in 2017.

President Ramamphosa’s hunt for $100 billion

The president’s political envoy is focused on securing international funds. It’s a proposal president Ramaphosa announced soon after replacing former president Jacob Zuma.

During Zuma’s tenure, foreign investment dried up amid financial uncertainty. Exchange rates plummeted amid catastrophic cabinet reshuffles. Unemployment grew exponentially, and accusations of ‘state-capture’ turned many upstanding investors away.

President Ramaphosa is in the process of reinstalling investor faith – political and financial damage control, if you will. While South Africa is still left picking up the pieces left by former administrative failures, markets are predicting a slow, but steady, increase.

Speaking on his mission to rebuild to the economy, Ramaphosa said:

“South Africa is an investment destination with significant unrealized potential. 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.”

The South African delegation, headed by President Ramaphosa, also includes Ministers of International Relations and Cooperation; Defence and Military Veterans; Energy, Police and Deputy Minister of Trade & Industry. The final destination for this leg of the journey is the United Arab Emirates.

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