SA, Cuba sign agreement to boost trade

South Africa’s minister of trade and industry, Rob Davies, and Cuba’s ambassador to South Africa, Carlos Fernandez de Cossio, have signed amendments to the Agreement on Economic Assistance in Pretoria. The agreement aims to stimulate bilateral trade.

This follows President Jacob Zuma’s 2010 state visit to Cuba, where he announced a R350-million economic assistance package to the country.

The multi-million rand economic assistance package is to assist with agricultural development and infrastructure reconstruction following devastating hurricanes in the country in 2008.

Davies said R40-million from the package would be granted to buy seeds; “R5- million is for purchase of seeds in South Africa, and the remaining R35-million for purchase of seeds either in South Africa or elsewhere in the world.’

He added that R100-million was allocated for purchasing goods on the South African market and R210-million was toward the credit line.

The credit line entails a first tranche of R70-million to be made available immediately upon the agreement being implemented. The second tranche, R140- million, is available after the repayment of the initial R70-million.

In 2012 Davies signed the Agreement on Economic Assistance on behalf of South Africa with the former Cuban ambassador to South Africa, Angel Villa. Parliament ratified and finalised the agreement later that year.

He said the implementation of the agreement had been delayed by the withdrawal of the Industrial Development Corporation as a facility agent, among other reasons.

“This meant that a new facility agent had to be found, and the DTI is pleased that Dirco [Department of International Relations and Cooperation] – through the African Renaissance Fund – agreed to act as the new facility agent.

“The DTI and other government departments such as the Department of Agriculture, Forestry and Fisheries and the National Treasury as part of a steering committee will continue to provide support to Dirco,’ said Davies.

Davies added that the agreement required some amendments to make it more exporter-friendly.

The amendments take into account concerns raised by potential exporters over payment procedures, to ensure that small- and medium-term enterprises also benefit by reducing the minimum amount for transactions to R100 000, from R2.5-million.

“The exporters wanted to have some guarantee of payment prior to goods being shipped to Cuba,’ Davies said.

Davies added that the agreement would be mutually beneficial to the two countries. He said, “We hope this will be a catalyst for strengthening commercial relations generally.’

Trade has increased from R27.7-million in 2009 to R63-million in 2013 between the two countries.

De Cossio said Cuba was pleased that relations with South Africa had reached this point.

“We are doing so in the context of the year in which we celebrate 20 years of diplomatic relations between our two countries.’

South Africa would rank third in terms of Cuba’s trade partners in Africa, after Algeria and Angola.

Source: SAnews.gov