An opinion of H.E. Mxolisi Nkosi, Ambassador of South Africa  to Belgium, Luxembourg, and Head of Mission to the European Union.

At a press briefing following bilateral consultations with her Belgian counterpart, Didier Reynders in Pretoria in July 2012, Maite Nkoana-Mashabane, the Minister of International Relations and Cooperation remarked, “despite the ongoing economic challenges confronting Europe, Belgium has remained steadfast in its support for our development efforts”.

From 22-26 October 2013, South Africa will play host to a large delegation of Belgian businessmen and women, government ministers, academics and media representatives led by Her Royal Highness Princess Astrid. This will be Princess Astrid’s maiden role as head of the Belgian trade mission since the recent enthronement of her brother, now King Philipe, who used to lead such missions as crown prince. Representing over 170 Belgian companies, the delegation will be made up of up to 300 senior business executives covering a range of sectors, including transport and logistics, energy, construction and infrastructure, ICT, mining and jewellery, food and beverages, pharmaceuticals and the agro-processing industry.

The well-established tradition of Belgian royals leading trade missions started with Prince Albert back in 1962 who presided over 100 trade missions throughout the world in 31 years. Since 1993, this responsibility fell on the then Prince Philippe who has led more than 70 trade missions. One of these princely was a week-long trade mission to South Africa made up of 70 Belgian companies to explore business opportunities in 2006.

Since then, Belgium has become South Africa’s 13th largest export destination globally, 4th in the EU, with total exports from South Africa to Belgium at R15.3 billion and total imports from Belgium at R10.3 billion in 2012. Belgium ranks as the 6th biggest investor in South Africa, and 4th biggest source of official development aid from Europe, with a total €50 million committed until 2016. It is one of few trading partners in Western Europe with which South Africa has a favourable trade balance. South Africa offers a diverse basket of goods to the Belgian market, which include precious stones and metal, vehicle accessories, auto parts, chemical products, agricultural products and beverages. The main import products from Belgium are motor vehicles, machinery and mechanical appliances, petroleum oils, pharmaceuticals and insecticides.

In spite of its modest population of 10.5 million people, Belgium also remains an important source of tourism for South Africa, with a record tourism figure of 44 125 in 2012, placing her in the 15th position globally as a long haul source of tourism.

The Belgian trade mission is a reaffirmation of the importance of South Africa as a trading partner and investment destination. It refutes the view held by some that South Africa’s decision to terminate the erstwhile bilateral investment treaties (BITs) is turning investors away from the country. In fact, the BITs termination clause is quite explicit that investment protection will remain in force for another 10-15 years after termination. The BITs will modernise investor protection in line with international experience and best practice. As has been the case before the termination of BITs, all investment in South Africa will continue to enjoy strong protection founded on the principles of the South African Constitution and the rule of law. This was recently confirmed by the Minister of Trade and Industry, Dr. Rob Davies, when he said the new act will be “built on the principles of the constitution, but will provide greater clarity to investors about the rights and protections they will enjoy”. Minister Davies emphasised that “there is no way we are doing anything other than modernising and updating our investment protection regime”.

Prudent, sound and consistent macro-economic policies pursued by successive South African administrations since 1994 have boosted investor confidence. South Africa ranks amongst the most open investment jurisdictions in the world and provides investment protection that is consistent with the highest international standards. This, together with the country’s favourable investment climate and the rigour of its legal framework make it a preferred destination for foreign direct investment.

Compared to the first trade mission in 2006, this Belgian trade mission is comprised of more than double the number of business executives, signifying the increasing interest that the Belgian business community attaches to South Africa. In the build-up to the mission, Belgian investors have highlighted the solid good corporate governance framework, the rule of law and advanced infrastructure as comparative advantages that make South Africa an attractive business proposition. With a GDP of $384 billion and accounting for 30% of the total economy of sub-Saharan Africa, South Africa is viewed as a gateway into the hinterland of Africa. It’s highly developed road, rail and ports infrastructure makes it a natural hub for shipping to and from Europe, the Americas, Asia, Australasia and both coasts of Africa. This explains the priority Belgian interest as expressed in the large concentration of transport and logistics executives in the delegation.

It is also significant to note that the sectors represented in the Belgian trade mission correspond with those identified by the South African government as the principal drivers of the economy, namely mining, agriculture, tourism, infrastructure development, the green economy and manufacturing. It is a concrete expression of the undertaking made by Reynders during his visit in 2012 when he declared that “Belgium is committed to working closely with South Africa in the identification and implementation of these various projects, which have the potential to assist South Africa achieve its developmental objectives, especially in the fields of infrastructure development, skills development, energy, water and education”.

Without any doubt, this much anticipated mission will go a long way in contributing to South Africa’s economic relations with Belgium and indeed its economic development programme.