Russian companies are urged to increase their investment in South Africa by taking advantage of the investment opportunities presented by the industrial reform of the South African economy.

Addressing the South Africa–Russia Business Council in Pretoria, Department of Trade and Industry trade and investment deputy director-general Pumla Ncapayi noted that Russia was a key strategic trading partner in South Africa’s integrated national export strategy.

South African exports increased from R2.1-billion in 2011 to R3.7-billion in 2015, reflecting an average growth of 16%. “There is greater potential for trade gains with Russia, particularly in the identified sectors. By facilitating increased partnerships between [the two countries’] businesses, these gains can be realised sooner rather than later,” said Ncapayi, adding that this would increase the level of foreign direct investment, which would further strengthen an economic partnership between Russia and South Africa.

South Africa has successfully attracted investment from large Russian multinationals, and the alignment of this investment with South Africa’s Industrial Policy Action Plan was welcome, noted Ncapayi, as it contributes to the country’s industrialisation goals. Similarly, local companies have invested in strategic sectors within the Russian economy.

“To attract further investment in value-added manufacturingsectors in close proximity to the source of raw materials, South Africa has established special economic zones that offer unparalleled opportunities for Russian investment. At the same time, they enable mutually beneficial partnering with South Africa to fulfil its development and industrialisation agenda,” explained Ncapayi.

She further highlighted that, under the Operation Phakisa initiative, the South African government had embarked on a campaign to fully exploit the potential of the oceans economy, where opportunities include aquaculture, marine transportand manufacturing, ship repair and oil and gas.

“Other opportunities are in the energy and infrastructure[sectors] with targeted investments,” she added.

Ncapayi singled out the department’s Black Industrialists Programme as particularly important for potential Russian investors, as the developments therein should provide assurance that partnering with beneficiaries of the government-led programme was a viable and profitable investment decision wherein technical and capacity constraints have been considered and partially addressed.

She stressed the need for mutual cooperation between the businesspeople and governments of both countries towards identifying complementarities, sharing experiences and promoting capacity building in a number of trade- and investment-related issues.