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Saudi-South African investment ties are in Bloomberg’s spotlight, after it suprred USD 5 bn worth of agreements across renewable energy, logistics, gas stations, and real estate, with more on the way. Official and business missions have been shuttling between both countries since 2022, deepening bilateral investments and pushing the pair to consider launching a Johannesburg-Riyadh direct flight, the business information service reports.
Why go South? South Africa’s status as Africa’s most industrialized nation, coupled with a strong infrastructure and undervalued companies, is attracting strategic long-term investors. The country offers “high-quality management teams and intellectual property” at attractive valuations, said Investec M&A head Ruven Naidoo.
A budding relationship: Since the meeting between Crown Prince Mohammed bin Salman and President Cyril Ramaphosa in 2022, ties between Saudi Arabia and South Africa have strengthened through the exponential growth of Saudi investment in the African economy, explained South Africa’s International Relations and Cooperation Ministry Spokesperson Chrispin Phiri.
More than trade and investment: Deeper economic and diplomatic ties have led to the institutionalization of relations through the Joint Economic Committee, whose upcoming session will be hosted in Riyadh next month. Moreover, Saudi Arabia’s Vision 2030 plan committed USD 41 bn to African investments by 2030.
Targeting new sectors: Efforts are also underway to boost cooperation in the pharma, automotive, financial services, commodities, and agriculture sectors, said Saudi-South Africa Business Forum Co-Chairman Stavros Nicolaou, reflecting the ongoing growth of bilateral trade. South African exports to Saudi Arabia rose to ZAR 7.3 bn in 2024 from ZAR 6.6 bn in 2023.
Growing trade, remaining hurdles. However, the lack of bilateral investment treaties and the presence of bureaucratic procedures complicate investments in South Africa, said Saudi Commercial Attaché in Johannesburg Hussam Algheraimil. On the other end, the drop in oil prices is putting pressure on Saudi investments abroad.
