Johannesburg - A debt of R1.1bn owed by Cuba for diesel engines bought from South Africa during the 1990s was cancelled on Tuesday, the presidency said.
"It is not as if Cuba could not repay the debt. The problem is that it was becoming a hindrance to trade and economic development between two countries," Trade and Industry Minister Rob Davies
said in a statement issued by the presidency.
"South African businesses demanded cash in advance because the Export Credit Insurance Corporation of the DTI could no longer insure Cuba's orders as it had exhausted its credit limit," he said.
Davies signed the agreement on Tuesday.
Minister of Home Affairs Nkosazana Dlamini-Zuma
also signed an agreement on the waiver of visa requirements for holders of diplomatic, official and service passports. This would allow citizens with relevant travel documents to enter and remain in both countries for up to 90 days without visas.
These agreements came after President Jacob Zuma
announced on Tuesday that a R210m credit line package for Cuba had been finalised, and was aimed at boosting economic ties.
"One aspect of the package is the extension of credit guarantees to Cuba, to the value of seventy million rand," Zuma said in a speech prepared for delivery at the SA-Cuba business forum in Havana.
"This facility from our government's Export Credit Insurance Corporation will insure South African suppliers for exports to Cuba. The modalities of this, including the products, coverage and other issues are being finalised at a technical level," he said.
Zuma additionally announced a R40m contribution towards Cuban agriculture for reconstructive efforts following a destructive hurricane in 2008.
"We will also make available R100m from our African Renaissance Fund for purchases from South Africa... These facilities will help us remedy a worrying situation as South African exports to Cuba had fallen from R82m rand in 2008 to only R1m this year, in 2010," he said.
South Africa offered promising investment opportunities in areas like automotive components, capital equipment, aerospace, chemicals, agro-processing and ICT, Zuma said.
"We would also like to bring to your attention our massive infrastructure development programme, on which South Africa will spend more than one hundred billion US dollars over the next three years. Cuban companies and skilled personnel can explore opportunities in this programme."
Zuma acknowledged the deployment of more than 400 Cuban professionals to the architecture, engineering, medical and technical industries in the country.
"Cuban doctors have for many years provided service to people in need," he said.Outstanding hospitality
"Of significant importance is the training of our young people as medical professionals, through Cuba's generous offer of eighty scholarships each year."
Through this programme, more than five hundred young South Africans from impoverished communities had been given the opportunity to pursue a career in primary health care and provide a service to their communities."
Zuma praised bilateral programmes in place for health, labour, social development, housing and public infrastructure.
"We extend our gratitude to President Raul Castro Ruz for the outstanding hospitality extended to us, and also the discussions we have had which will take our relations forward."