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UK eyes SA govt contracts

Dec 05 2010 17:14 André le Roux

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Johannesburg - Britain wants a piece of South Africa’s plan to invest more than R750bn in infrastructure.

“We want UK companies tendering. They have a good chance of winning contracts,” says Henry Bellingham, the UK’s new minister for Africa.

Concluding a trade-driven visit to the country, Bellingham says expanded trade with South Africa is crucial for Britain’s own “export-led” recovery from the economic meltdown in Europe and the UK’s attempts to dig itself out of a huge debt hole.

South Africa can expect a “more concerted emphasis and drive on the trade agenda”, from the UK’s new coalition government.

The British export drive to South Africa and the rest of the world is more than just a business venture, it is an imperative for that economy.

“We are paying £120m (about R1.3bn) a day on our national debt. It is money down the drain. About 40% of our growth will come from exports next year,” he predicts.

Most of the developed world is increasingly looking at developing countries – which are leading the global push out of the recession with close to double digits growth levels – to boost their own economies.

“In the first half of this year bilateral trade with South Africa went up by 25%. That’s incredibly encouraging,” says Bellingham.

“We are going to reinforce existing areas of trade with South Africa. The country has world-class natural resource companies with historical ties to the UK.”

He says Britain is ready to invest in “green” technologies. “We want to pursue the low carbon/high growth agenda.

No concerns over BEE

There are big opportunities for renewable energy, generating and transmission technologies. The UK companies want to get involved here.”

Bellingham says the UK is keen on getting involved in the provision of tertiary education in the country and encouraging new dual listings by South African companies on the London Stock Exchange.

He has no concerns with South Africa’s black economic empowerment requirements for rewarding contracts in its infrastructure drive.

“It will be a level playing field for all overseas companies bidding. UK companies have a pretty good record of dealing with those requirements as it is. Our banks here, like Standard and Charter, are dealing with it well. They don’t see it as a barrier because those rules apply to all foreign companies.”

The UK is one of the top two largest foreign investors in South Africa and there are more than 200 South African companies that have established a presence in the UK.

Trade between the UK and South Africa more than doubled between 1998 and 2008, from R25.5bn to R69.6bn. Last year the UK was South Africa’s fifth largest export partner after China, the US, Japan and Germany, with exports valued at R25.4bn and imports from the UK at R21.6bn.

According to the Department of International Relations and Cooperation, South Africa’s biggest imports from the UK are turbo jets, turbo propellers, gas turbines, machinery, mechanical appliances, electrical equipment, vehicles, aircraft, chemicals and allied products.

Exports to the UK are dominated by natural and precious stones, mineral products, vehicles, machinery and mechanical products, fruit and vegetable products, base metals and articles, prepared foodstuffs and beverages.

Britain’s renewed focus on South Africa and the world comes as China emerges as a major investor on the continent.

At the end of last year, China had invested $9.3bn in Africa, according to the China-Africa Trade and Economic Relationship Annual Report 2010.

- City Press

For more business news, go to www.citypress.co.za/Business.
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