UK eyes SA govt contracts
André le Roux
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.
I think the UK has a great chance of getting contracts from the ANC. They just have to do a couple of things first:
1: Tell the ANC that Mugabe is right, the whites should be exterminated.
2: remind the ANC that the UK is predominantly non-white nowadays, so the BEE credentials are 100%
3: Start putting wads of cash in offshore bank accounts for immediate transfer to the necessary cadres.
Hehehehehehe - too true YBID! That is exactly how the Brits do their trade (no scruples at all!).
The U.K has made a strict policy of not paying bribes so good luck in landing any of these contracts. There skilled labour force is very good but also very expensive so i do not see them being very competitive sorry U.K the world changed and you were left behind.
Graham du Toit
@yasbutIdunno - you are correct. The same bribes will be paid BUT whetever will be built only needs to be done ONCE. When the tick Julius builds something it costs the same but has to be rebuilt and paid for again!
@ YasButIdunno: I think you should stop doing 3 things: 1. Stop your economics 101 studies, you won't ever pass. 2. Stop smoking whatever you are, it's affecting your vision. 3. Judges from 1 and 2 you probably won't mind standing in the queue. Case closed.
@YasButIDunno Please look properly at your statistics before making such childish comments. I can clearly see that your just another complaining South African.
How can we every move forward as a nation if we care going to point fingers all the time. I jhave lived long enough in SA to realize it won't go to the dog. Please have even a little faith in SA government and it's people.
@YasButIDunno.. There is a saying that goes everyman is intelligent until they open their mouth!
I think the Brits must be honest about who they bribed to sell us their arms for the arms deal and give us proceeds back - actually they must give us all the money back and we will keep the arms as an offset.
Then Grootbaas Zuma must start to choose between Mad Bob and Great Britain as a partner - you kind of cannot have both - can you?
Then we want unrestricted access for all Africa's produce to the whole of the EU, before we start buying other stuff from them - that is called trade. Not this we sponsor our agricultural sector with more subsidies than aid to Africa, and now we want reasonable change to do business in Africa. We as Africans want to have a reasonable chance to sell meat, wine, cotton, IT, fruit, maize into the UK as well. Otherwise, forget about it - we will never forget the arms deal bribes, on top of the unwillingness of the UK to intervene militarily in Zimbabwe, the unwillingness to stop supporting PW Botha and the 42 000 innnocent women and children you killed in the South African war so that you can steal our gold and diamonds.
No concerns over BEE. The UK clearly hasn't heard of the fact that fronting is no longer acceptable in government contracts and that the company performing the construction must have ownership.
I really dont see UK companies giving shares over to BEE partners when up til now all they needed was a local BEE company to do the bidding for them.
If they want to do business with us, they need to relook at their VISA requirements, especially a business Visa
Silly British,they do not meet the BEEE criteria,however as with their arms scandal I am sure they will pay huge 'commissions' to the normal suspects!
C van Oudorp
Is that so? They want something from us? The UK has made it virtually impossible for young South Africans to get temporary work opportunities there. Even getting a visitor's visa is hard enough. My son has spent two years there - finding his own high-tech employment, paying tax, paying his own rent and transport and food, doing volunteer work with poor youth in some of their slums -- and not taking anything from the Brits. Yet he cannot return there even when work is offered to him. How hard is it for a Brit to enter SA? Obviously allowing SA youth to go to the UK is not of the same economic weight as trade and FDI. Nevertheless: If they want to lift their miserable productivity by dealing with us, we should set some conditions favourable to us - like demanding that they ease the way for our youth to broaden their horizons. A quote from a speech in India by UK PM (David Cameron)follows. Is the UK Africa Minister going to put his money where his PM's mouth is - and be consistent around the world? Or was Cameron in fact obscuring the intention to seek advantage for the UK only and being selective about his interpretation of globalisation?: "To my mind globalisation should be about more than the trade of goods and services; it must be about the trading of experiences and stories between friends on opposite sides of the world and our countries can set the example. That’s why today we are launching a new network to bring together the next generation of British and Indian leaders. There will be politicians – they always seem to turn up everywhere, yes – but there will be entrepreneurs, scientists, people in the media and dynamic young people from both our countries, brought together to find solutions to the challenges we face. I hope that by the time of the next UK-India summit they will be coming back to us buzzing with ideas and inspiration which both government and the private sector can act on."
@yasbutdunno, Whatever **But***, This is the most thought for thingy,the UK is trying to do. Europe is about to drown and starve,they really have to swallow their pride and do like wise.At any cost,I am pleased because this means jobs creation in RSA and avoiding the about to happen disaster in Europe. We know this guys very well, they use to colonise us before remember? We will be so kind to open doors for them, but for a different agenda this time.
Obviously, the Poms don't know that the new Chinese colonialists are here already and they know how to work... just because the UK is broke, doesn't mean they should be trying to take money from ZA
I am am Scot living in SA
Tell those pommies to go away.
We are not bankrucpt like them & US.
We do not need their investments.
don't you think they've done that allready..?
It is nice to imagine that you will have a share of R750bn in infrastructure. But you can be sure that means R750bn of salary increases and new German luxury cars. Service delivery is like our roads - in not a good state.
@YasButIDunno and Graham du Toit ...Brains aren't everything. In fact in your case they're nothing
@JJ: I am very grateful to God for the brain with which He chose to endow me. What I am extremely resentful about though, is to be fleeced for corporate and personal tax by a government which pisses the money against the wall and gives us little or nothing in return for our significant contributions.
Perfidious Albion, or simply the old maxim (was it Lord Palmerstone?) of nations not having friends, only interests?
Huh! This is the British playing an opening gambit to get a price for ensuring the results of the arms deal corruption investigation get covered up - just like they did for the Saudis.