South African Trade and Industry Minister Rob Davies is in Cuba to meet with officials, visit the International Havana Fair, and advance deals for South African companies.
Davies is accompanied by a business delegation of 18 South African companies representing capital equipment, electro-technical, mining, agro-processing, engineering, and metals.
Davies pointed out that the two countries’ “strong political relations are not underpinned by robust economic relations,” but added that a recently activated aid package of 350 million South African Rand (US$41 million) will boost economic relations.¬†The aid agreement was signed during a Havana visit in 2010 by President Jacob Zuma and ratified by the South African parliament in September.
The economic assistance package is divided into three facilities.¬†Facility A consists of a 40 million Rand ($5 million) grant for the purchase of seeds by Cuba.¬†Facility B of the agreement is a 100 million Rand ($14 million) solidarity grant, which Cuba may use without having to buy from South African companies.¬†Facility C consists of a 210 million Rand ($24 million) credit line in two tranches from South Africa‚Äôs Export Credit Insurance Corporation.
Davies said Cuba would like to borrow $11.5 million to have the Instituto Nacional de Recursos Hidr√°ulicos (INRH) buy raw material from a South African manufacturer¬†used for the production of water pipes in Cuba. Once Cuba pays back this first tranche of the credit line, South Africa will grant it a second tranche, Davies said.
As part of the 2010 agreement, the South African government agreed to cancel $159 million worth of defaulted debt, and offered Cuban state companies to participate in the country‚Äôs $100 billion infrastructure construction program.
South African mining companies have expressed interest in Cuban nickel and other minerals in the past, but no major investments have materialized. More recently, a South African group of investors has financed hotel construction in Cuba.
Meanwhile, Cuba has provided health services, as well as personnel and logistics for workforce housing construction and construction of facilities in the run-up of the 2010 soccer World Cup. Also, South Africa is funding some of the healthcare programs Cuba is providing to third nations in Africa.¬†In May, South Africa agreed to pay for 208 Cuban doctors to be deployed in South Africa. In addition, Cuban experts will provide support in implementing South Africa‚Äôs National Health Insurance, help overhaul the healthcare system by refocusing on primary healthcare and streamlining administration, improve human resources management, and help South Africa with research and development, particularly in biotechnology.