South Africa, Saudi Arabia seek to boost trade following pandemic dip

South Africa, Saudi Arabia seek to boost trade following pandemic dip
South Africa imports approximately 40 percent of its oil from Saudi Arabia, according to the EIA. (Shutterstock)
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Updated 17 September 2021

South Africa, Saudi Arabia seek to boost trade following pandemic dip

South Africa, Saudi Arabia seek to boost trade following pandemic dip
  • Saudi South African Business Council pledges to boost cooperation in infrastructure development, agriculture, mining and energy, tourism

JEDDAH: South Africa and Saudi Arabia are looking to boost trade between the two countries following a pandemic-hit year that saw imports from the Kingdom fall to a four-year low in 2020.

South African imports from Saudi Arabia slid to $2.69 billion in 2020 from $3.66 billion in 2019 and $5.41 billion in 2018, according to data from the UN Comtrade database. The vast majority of that was made up of oil and fuels ($2.27 billion or 84 percent in 2020), followed by fertilizers at $145.3 million and plastics at $124.5 million.

South Africa imports approximately 40 percent of its oil from Saudi Arabia, according to the EIA.

Far fewer goods went the other way, with Saudi Arabia importing $347.8 million from South Africa last year, down from $423.8 million in 2019 and $423.0 million in 2018.

The Saudi South African Business Council under the umbrella of the Federation of Saudi Chambers, held the Saudi South African business webinar on Thursday, co-organized with the Johannesburg Chamber of Commerce.

The two countries have committed to strengthen their ties by working more closely in sectors such as infrastructure development, agriculture, mining and energy, tourism, and other areas.

“Despite the progress in our relations, we look forward to expanding the scope of our cooperation with South Africa in line with our respective capabilities,” said Chairman of the Saudi-South African Business Council Hisham Al-Amoudi. “The Saudi market has the capacity to host more South African investments, namely in mining, health care, small to medium enterprises (SMEs), agriculture and information technology, among others.”

Al-Amoudi said that a number of measures must be taken to achieve this, including activating the agreements and memorandum of understanding (MOUs) signed between the two countries, increasing activities of the Saudi South African Business Council, “developing programs that support our goals, and enhancing our overall dialogue on topics of mutual interest.”

South African President Cyril Ramaphosa made a state visit to the Kingdom in 2018 to meet King Salman and the Crown Prince Mohammed bin Salman to assess relations, focusing primarily on strengthening economic linkages between South Africa and Saudi Arabia.

Saudi Arabia and South Africa are both G20 countries, and the Crown Prince has met with the South African President on the sidelines of the G20 Summit in Argentina.

“Saudi Arabia is also a large investor in South Africa, especially in the area of renewable energy,” said Al-Amoudi.

“We seek to work with our South African friends to facilitate the access of Saudi products to the South African market, and enhance the Saudi-South African balance of trade,” he said. “I hope that these initiatives will elevate a strong relation to a higher level,” he added.


Inflation in eurozone economies is transitory: IMF

Inflation in eurozone economies is transitory: IMF
Image: Shutterstock
Updated 07 December 2021

Inflation in eurozone economies is transitory: IMF

Inflation in eurozone economies is transitory: IMF
  • The reason the IMF gave this assessment is that the hikes in consumer prices didn’t turn into wage increases

Despite inflation hitting a record high last month in the euro area, the International Monetary Fund said that the rise in prices is transitory and not worrisome.

Annual inflation rate in the zone reached 4.9 percent in November, Reuters reported.

The reason the IMF gave this assessment is that the hikes in consumer prices didn’t turn into wage increases, also known as the second-round effect.

It pointed out that, meanwhile, monetary policy should remain loose.

The international lender also stated that governments in the euro area should continue backing their economies to overcome the adverse effects initiated by the pandemic. The organization added that fiscal consolidation is not urgent, but its plans should be readily available now.

“Policies should remain accommodative but become increasingly targeted, with a focus on mitigating potential rises in inequality and poverty,”the IMF said.

I took a quote from the source since it's reuters.


Bahrain aims to reduce government shares in listed companies

Bahrain aims to reduce government shares in listed companies
Updated 07 December 2021

Bahrain aims to reduce government shares in listed companies

Bahrain aims to reduce government shares in listed companies

JEDDAH: Bahrain aims to reduce government ownership in listed companies, the CEO of the Bahrain Bourse has said.

The country aims to list more governmental companies to encourage the private sector to follow the lead. 

At least two governmental firms are currently close to listing, including the Bahrain Airport Company,  Khalifa Al Khalifa added in an interview with Al Arabiya.

Bahrain Bourse has also reached an agreement with Abu Dhabi to facilitate direct trading between the two markets.

It is also implementing a four year strategy ending in 2026, to develop the financial market sector by listing more companies, including small and medium-size enterprises, Al Arabiya reported.


Oil prices exceed $70 pushing aside omicron concerns

Oil prices exceed $70 pushing aside omicron concerns
Image: Shutterstock
Updated 07 December 2021

Oil prices exceed $70 pushing aside omicron concerns

Oil prices exceed $70 pushing aside omicron concerns
  • Meanwhile, companies made offers on Monday to buy crude oil released from US strategic reserves

JEDDAH: Oil prices rose to $70 a barrel earlier on Dec. 7, as concerns eased about market demand and as fears of the omicron variant waned, Bloomberg reported.

Brent crude futures were up $1.66, or 2.3 percent, at $74.74 a barrel by 1005 GMT, after settling 4.6 percent higher on Monday.

US West Texas Intermediate crude was at $71.30 a barrel, up $1.81, or 2.6 percent, building on a 4.9 percent gain in the previous session.

At the weekend, Saudi Arabia increased the cost of its crude for buyers in Asia and the US, signaling that it still sees strong demand despite the wave of restrictions by various national governments in response to the latest variant of the COVID-19.

Meanwhile, companies made offers on Monday to buy crude oil released from US strategic reserves, according to Bloomberg.

The winning bids for the first 32 million barrels will be announced on Dec. 14. 


At least two oil refiners have expressed interests. 

The US release of crude is part of the Biden administration’s efforts to control gasoline prices, Bloomberg said.


UAE bank credit falls for first time since May; deposits rise

UAE bank credit falls for first time since May; deposits rise
Updated 07 December 2021

UAE bank credit falls for first time since May; deposits rise

UAE bank credit falls for first time since May; deposits rise

Gross credit in the UAE declined by a monthly rate of 0.8 percent in October to hit 1.76 trillion dirhams ($480 billion) on falls in both domestic and foreign credit, according to data published by the country’s central bank.  

The October decline in gross credit is the largest since March and is in contrast to September's performance, when it rose 0.3 percent month-on-month. 

Domestic credit went down due to drops related to the government, public, and private sectors. Credit provided to non-banking financial institutions rose by 2.7 percent, the central bank said in a press release issued Dec. 6.

In September, domestic credit increased by 0.2 percent to 1.6 trillion dirhams, while foreign credit, which includes loans, trade bills and advances to non-resident companies other than banks, grew 0.8 percent to 164.4 billion dirhams. 

Bank deposits in the UAE went up by a monthly rate of 1.3 percent in October to hit 1.97 trillion dirhams. This was the fifth consecutive month of growth and is the highest monthly rate since June.

This was mainly attributed to a 1.7 percent rise in residential deposits, offsetting a 1.7 percent drop in non-residential deposits. 

Outside of residential deposits, government and public sectors experienced the highest increases, jumping by 5.5 percent and 3 percent, respectively. At the same time, private sector deposits edged up slightly, rising by only 0.6 percent.

The monthly rate of growth in deposits accelerated from 0.7 percent recorded in September when resident deposits grew 0.3 percent to 1.7 trillion dirhams while non-resident deposits jumped 3.7 percent to 243.2 billion dirhams.    

The central bank also said that the gross banks’ assets increased by 0.7 percent in October when compared to the previous month. The balance stood at 3.27 trillion dirhams by the end of the month.

The UAE’s monetary base, which includes currency issued and bank reserves among others, grew by 1.3 percent month-on-month in October. This was driven by widenings in both issued currency and banks’ current accounts and overnight deposits with the central bank.

Moreover, M1, a monetary aggregate encompassing currency outside banks and short-term monetary deposits, underwent a 0.5 percent monthly increase in October. This was attributed to jumps in both of its components.

Additionally, a wider measure of money, M2, rose by 0.8 percent on more quasi-monetary deposits and a higher M1. Quasi-monetary deposits consist of residential time and savings deposits in local currency in addition to residential deposits in foreign currencies.

Similarly, M3 increased due to larger government deposits as well as higher M1 and M2.


High gas prices may delay energy transition: TotalEnergies CEO

High gas prices may delay energy transition: TotalEnergies CEO
Updated 07 December 2021

High gas prices may delay energy transition: TotalEnergies CEO

High gas prices may delay energy transition: TotalEnergies CEO

JEDDAH: High fossil fuel prices may affect the transition towards renewable energy sources, the leader of one of Europe’s largest oil companies has warned.

If fuel prices continue to remain high, this “might jeopardize the development” of alternatives, said TotalEnergies SE CEO Patrick Pouyanne, according to Bloomberg.

“Some Asian countries about to switch from coal to gas might be discouraged by too high energy prices,” he added, while speaking at the World Petroleum Congress on Monday. 

Pouyanne made the comments as Saudi Aramco CEO Amin Nasser warned that renewable energy supplies are not yet strong enough to compete with fossil fuels. 

On Sunday, Aramco increased the cost of its crude for January in an indication that demand outlook will remain high, Bloomberg said.

On Tuesday, US crude oil rose $2 to hit $71.52.