The United Arab Emirates (UAE) and its business sector may invest in some of South Africa’s major state-owned enterprises (SOEs), such as Eskom and SA Airways (SAA) if this opportunity arises, according to UAE ambassador Mahash Alhameli.
Alhameli was speaking at an interview at the UAE embassy in Pretoria.
“The challenge in the South African economy is these companies [SOEs] … We have been in discussions even before pledging [a $10 billion investment]. We are in discussions on SAA and Eskom,” he said.
“We know there are a lot of pressures in SOEs. They have difficulty financially.”
The embassy of the UAE had been facilitating talks between SAA and Emirates Airlines for a couple of months.
Etihad were having separate talks with SAA, he said. “It’s company-to-company talks. As ambassador, I’m facilitating that,” he said.
SAA and Etihad previously had a code-sharing agreement but it ended in 2016.
Talks about the UAE’s involvement in Eskom “were not much” and not on the same level as the SAA talks.
The UAE had aviation, renewable energy and nuclear knowledge it could share with South Africa, Alhameli said.
Alhameli said the Abu Dhabi National Oil Company (Adnoc), the UAE’s state-owned oil company, had been looking at investment in South Africa. “There was a visit in the past two months to see what Adnoc can do.”
Earlier this month President Cyril Ramaphosa visited the UAE where the emirate pledged to invest $10 billion in South Africa’s economy. Media reports said the investment would focus on local tourism and mining.
“In the coming months and weeks there will be a number of delegations that will be exchanged between South Africa and the UAE,” he said.
Alhameli said that about 150 000 South Africans lived in the UAE.
“The outcome of the visit [by Ramaphosa] was very fruitful and it helped to establish relations between the two countries,” Alhameli said. He said the UAE believed that Ramaphosa’s new administration was going to be a strong one.
“The fields of investment have not been identified as yet. In the upcoming weeks there will be a working paper or document,” he said.
“It is important for South Africa to identify which areas are permitted and what other areas the UAE might be given a chance to select.”
A committee comprising representatives from both countries would be formed to determine this, he said.
Alhameli said the UAE had been dealing mainly with the Ministry of Trade and Industry, the National Treasury and Ministry of Economic Development regarding the pledged investment.
There was no official document yet from the UAE government stating which sectors of the South African economy would benefit from the $10 billion investment, he said.
Alhameli was not able to give any time period in which the money would be invested. “A big part of the investment will go to the public sector,” he said.
The $10 billion pledge was a real commitment and not just talk, Alhameli said. “The UAE is serious.”
The UAE has recently made pledges in Zimbabwe and Ethiopia. “We have been supporting a lot of countries,” Alhameli said.
The main UAE investments in South Africa are in the defence sector, technology, property and hospitality. UAE companies have joined ventures with local defence companies, such as Denel and the Paramount Group.
There had been talks “with South Africa’s industrial heavyweights, such as Armscor and Denel”, he said.
A document that Alhameli provided from a trade and investment workshop held in April showed the UAE’s seven strategic priority areas: transportation, health, education, space, renewable energy, technology and water.
About 200 South African companies are present in the UAE, including in the following sectors: construction, communication, financial services and healthcare, as well as hospitality and retail.
On the topic of the debate about land expropriation without compensation in South Africa, Alhameli said: “We are not concerned … This is a South African domestic issue more than an international issue.”
The government needed to make it clear to foreign investors that their investments were protected and to improve the business environment, he said.
South Africa faced a lot of challenges and if the $10 billion investment was “done in a good way” then there would be a good return in the years ahead, he said.
Prior to the pledge this month by the UAE there was a lot of communication between the UAE Embassy and ‘back home’. “We have been reading and studying the situation in South Africa,” he said.
Source – Fin24