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SA, Cuba sign agreement to boost trade

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Old 09-26-2014, 11:30 AM   #1
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Pie Chart SA, Cuba sign agreement to boost trade

South Africa and Cuba on Friday signed amendments to the Agreement on the Economic Assistance, which will stimulate bilateral trade, among other things.

The amendments of the agreement were signed by Minister of Trade and Industry Rob Davies and Cuba Ambassador to South Africa, Carlos Fernandez de Cossio, in Pretoria.

The signing of the amendments to the agreement is a follow-up to President Jacob Zuma's 2010 State Visit to Cuba, where he announced an economic assistance package of R350 million to Cuba.

The multi-million rand economic assistance package was to assist with agricultural development as well as in the reconstruction of infrastructure following devastating hurricanes in 2008.

Minister Davies said from the package, R40 million would be granted for the purchase of 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,” the Minister said.

He said R 100 million was allocated for purchasing goods on the South African market and R210 million was for the credit line.

The credit line entails a first tranche of R70 million to be available immediately on entry of the agreement into force. The second tranche of R140 million is available after the repayment of the initial R70 million.

In 2012, Minister Davies signed the Agreement on the Economic Assistance on behalf of South Africa with the former Cuban Ambassador to South Africa, which was followed by ratification of the agreement by Parliament that was finalised later that year.

He said the implementation of the agreement had been delayed by the withdrawal of the Industrial Development Corporation (IDC) as a facility agent, amongst 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 (ARF) – 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 the Minister.

Minister Davies said the agreement required some amendments to make it more exporter-friendly.

The amendments take into account, amongst other things, the concerns raised by potential exporters regarding payment procedures in the agreement, 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,” Minister Davies said.

Minister Davies said the agreement will be mutually beneficial to the two countries. “We hope this will be a catalyst for strengthening commercial relations generally,” said Minister Davies.

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

De Cossio said amendments of the agreement would further Cuba in terms of transformation.

He said Cuba was very happy 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.”

He said Cuba was proud that South Africa was celebrating 20 years of freedom and democracy.

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