What will S.Africa get from trading with Iran? - CNBC Africa

What will S.Africa get from trading with Iran?

Southern Africa

by Trust Matsilele 0

What is the meaning of Zuma's recent visit to Iran? PHOTO: Wikipedia

South Africa's President Jacob Zuma took a delegation of 180 business people to Iran. The delegation included six ministers on his two day state visit to Tehran. This trip seems to have been significant but the question is, how much will South Africa get from this relationship?

Zuma and his Iranian counterpart signed several agreements of corporations and trade and emphasis was on increasing non-oil trade between the two countries to a billion dollars by 2020.

This deal comes after years of seeing trade relations between South Africa and Iran declining due to sanctions imposed on Iran by the international community.

“South African exports to Iran declined from R1.27 billion in 2008 to R270 million in 2014,” Presidency spokesman, Bongani Majola, was reported to have said.

Brooks Spector, former US Diplomat and Associate Editor; Daily Maverick told CNBC Africa that it was interesting to see how South Africa would manage this new relationship considering other geopolitical competing factors.

“It is curious for South Africa to be in Iran and Saudi Arabia at the same time when these two countries are at war with each other in Yemen. It’s potentially a good move, because of the need to balance the Saudi Arabia connection; this will require economic diplomacy to balance these two opposite competing interest,” he said.

He however warned that Iran was still difficult to trade with due to certain international sanctions that were still in place.

“It is easy to say Iran is back into the economy but there are all kinds of sanctions that are still in place,” added Spector.

“These include financial, trade, sensitive material, European, U.S sanctions. It is not easy to send money to Iran as one has to go through international banking system.” For more on this, watch the interview below: