SA wants to boost Iran trade
180-strong SA delegation puts out feelers in Iran in a bid to restore and surpass trade figures of the past
President Jacob Zuma and Iranian President Hassan Rouhani this week agreed to increase South African and Iranian non-oil trade to $1 billion (R14.4 billion) by 2020 following the lifting of international sanctions on Iran earlier this year. This compares with total trade of R358 million between the two countries last year.
The Tehran Times website quoted Iranian Finance Minister Ali Tayebnia as saying: “We hope to swell bilateral trade to somewhere in between $1 billion and $2 billion in the coming years.”
The Iranian state-owned Mehr news agency reported that Tayebnia, following a meeting with his South African counterpart, Pravin Gordhan, announced that an Iranian bank was seeking to establish a joint bank in South Africa.
Sanctions knocked South African exports to Iran from R1.5 billion in 2007 to R211 million last year.
In a speech during the state visit, Zuma said: “Total trade, however, has unfortunately been falling over the past decade, owing to, among other things, the nonexistence of banking relations between South Africa and the Islamic Republic of Iran, and the various sanctions imposed by the West.”
The president led a 180-strong delegation to attract billions of rands in Iranian investment.
He was accompanied by Deputy Minister of International Relations and Cooperation Nomaindia Mfeketo, Minister of Trade and Industry Rob Davies, Minister of Energy Tina Joemat-Pettersson, Minister of Water and Sanitation Nomvula Mokonyane, Minister of Economic Development Ebrahim Patel and a business delegation.
Black Business Council CEO Mohale Ralebitso, said that their vice-president, Sandile Zungu, and co-chairperson, Sello Rasethaba, were part of the South African delegation.
“We welcome the mission to Iran and hope that it will enhance opportunities for South Africa,” said Ralebitso.
Prior to the international sanctions, Iran was the biggest oil supplier to South Africa.
Since June 2002, South Africa has not been importing Iranian crude oil. South Africa is now looking at building an oil refinery to process Iranian crude oil.
The SABC quoted Davies as saying that cordial diplomatic ties presented South African companies with an opportunity to invest in the untapped Iranian market.
Zuma said that eight memorandums of understanding were signed to strengthen the countries’ bilateral economic cooperation.
“I have been accompanied by a large group of South African companies in an array of sectors, including agriculture, telecommunications, financial services, mining, chemicals and energy.
“The sizable delegation aptly articulates the seriousness that we accord to strengthening our trade, investment and economic bilateral relations.”
He also announced the establishment of the South Africa-Iran Business Council.
“South Africa offers many opportunities, not only for access to a growing domestic market, but also as a platform to the dynamically growing markets of the African continent...
“South Africa is the leading regional-hub location for companies seeking to establish themselves in the African region,” said Zuma.
Major South African companies in Iran include MTN, which has a 49% stake in the Irancell consortium. Sasol divested completely from the country in 2013. MTN could stand to see funds of up to $1.1 billion repatriated into its coffers. The amount comprises about $600 million of declared and unpaid dividends and $500 million of intercompany loans and accumulated interest.
MTN was restricted from repatriating money from Iran because of the sanctions.
MTN, in its annual report released this week, said: “The easing of sanctions in Iran and its related economic uplift offers significant opportunities to expand our services in the country, particularly in the digital space where we have a strong market position.
“We are working towards the remittance of R15 billion during the first half of 2016.”
TRADE INDABA Trade and Industry Minister Rob Davies (left) with President Jacob Zuma at the SA-Iran Business Forum in Tehran. With them is Iran’s industry minister, Mohammad Reza Nematzadeh, and (right) Masoud Khansari, head of the Tehran Chamber of Commerce