Should Our Charity Begin from Saudi Arabia?

Should Our Charity Begin from Saudi Arabia?

Sunday, October 9, 2022 6:00 pm

Presidents Buhari and Ramaphosa

By Simbo Olorunfemi
Monday morning, I found myself on the South African Broadcasting Commission (SABC) TV Channel. I had to pay attention to the report that later that day, a South Africa-Saudi Arabia Joint Business Council was to be inaugurated in South Africa.
Apparently, a two-day Joint Economic Commission (JEC), the 9th edition, was going on in Pretoria, South Africa. It would eventually end with the signing of a memorandum of understanding to further cement trade and investment relationship between the two countries.
I have always been intrigued by the seemingly cosy relationship between South Africa and Saudi Arabia, being not quite sure about the historical feet upon which this relationship stands.
Eleven years ago, I had joined a group, made up of nationals of different African countries on a visit to the South African Embassy in Berlin, Germany. The Ambassador made a presentation, which, in part, showed the trade relations between South Africa and other countries.
I found from the presentation that Saudi Arabia was one of the countries on top of the ladder with respect to trade volume with South Africa, as the number 5 top exporter, with Crude oil being the major import from Saudi Arabia.
I was so intrigued by this that I could not help but put a question to the Ambassador. How come South Africa was importing most of its oil from Saudi Arabia? Why not Nigeria, given the rich historical relationship between the two countries? Why not Angola, if not Nigeria? Why Saudi Arabia in particular? The Ambassador was caught off-guard. My question was not part of the script. He fidgeted and struggled with a response which didn’t quite address the question.
Many years after, not much has changed. In 2021, South Africa imports from Saudi Arabia stood at 60.61 billion Rands, while South African exports to Saudi Arabia was 5.54 billion Rands.and imports from Saudi Arabia amounting to R 60.61 billion.
In 2020, South Africa exported $767M to Saudi Arabia, while imports from Saudi Arabia stood at $2.75B. As one would guess, the main products from Saudi Arabia to South Africa were Crude Oil ($1.87B), Refined Petroleum products ($395M), and Nitrogenous Fertilizers ($107M).
South Africa mainly export agricultural products,  mineral resources, chemicals, automotive parts and components to Saudi Arabia. But as can be obviously seen, there is a lopsidedness in terms of balance of trade, with trade imbalance in favour of Saudi Arabia.
Reports have it that in the last 25 years, exports from Saudi Arabia to South Africa have increased at an annualized rate of 10.7%, from $215M in 1995 to $2.75B in 2020.
From what I saw on SABC, the trade imbalance is a source of concern in some  quarters in South Africa. However, that is not of concern here, as I do not have and won’t assume the locus to interrogate that.
What is of concern to me here is what was of concern to me in Germany in 2011. Why is South Africa that engaged with countries outside of Africa for products readily available in the continent, even when they are traded at internationally agreed prices?
Whereas there has been some level of improvement in the volume of trade with Nigeria, but in comparison with that with Saudi Arabia, the difference is evident. Whereas South Africa imported oil to the value of 1.87 billion dollars from Saudi Arabia in 2020, importation of oil from Nigeria was about 500 million dollars.
A number of prospective benefits have been listed for the African Continental Free Trade Area (AfCTA). It has been touted as a move that will eliminate barriers to trade in Africa and significantly boost intra-Africa trade. Without the necessary political will, the lofty objectives can only be such on paper.
We do not need AfCTA to trade, if we really want to. A recognition of the fact that our existence and future is interconnected, just like our past, is all we need to let our charity begin from home.
I look forward to a day where a Joint Nigeria-South Africa Economic Commission receives as much attention as I saw with that between South Africa and Saudi Arabia receive on Monday.

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