Leuthard boosts business with South Africa

Doris Leuthard with South African Finance Minister Trevor Manuel: plenty to say, but nothing concrete Keystone

Economics Minister Doris Leuthard says her visit to South Africa has helped to raise the profile of Switzerland as a trading partner in the region.

On the second day of her visit to Pretoria, she signed a revised accord aimed at avoiding double taxation and an extended agreement on air transport between the two countries.

The double taxation accord, signed during a meeting with the South African finance minister, Trevor Manuel, replaces a 1967 deal and is in line with the latest changes in international fiscal policy.

Leuthard’s talks with Manuel focused on a wide range of issues, including South Africa’s limited banking licences and restrictive currency regulations.

However the discussions remained very general according to businessmen accompanying the Swiss economics minister and failed to produce any concrete results.

Also on the agenda was the South African government’s Black Economic Empowerment policy, aimed at helping populations that faced racial discrimination under the apartheid regime, which ended in 1994.

Progress made

Despite a lack of immediate tangible results, Leuthard was confident some progress was made on the economic front during her visit.

“I’m happy that the South African government has agreed to set up a joint committee in a bid to boost business relations and tackle concrete issues in the context of the free trade agreement with Switzerland and other countries of the European Free Trade Association,” she said on Tuesday.

South Africa, a key member of the South African Customs Union, which includes Lesotho, Namibia, Botswana and Swaziland, ratified the agreement last week.

The renewed air transport agreement is designed to liberalise air traffic between the two countries, giving better access to airports and opening the market for more competitors.

The deal comes despite South African Airways suspending its direct flights between Johannesburg and Zurich in April in favour of Munich after nearly 50 years of service. During talks with the transport minister, Jeffrey Radebe, the Swiss delegation proposed Geneva as an alternative destination.

Leuthard and Radebe, who is the acting health minister, also discussed efforts to combat the spread of HIV and a proposal to make South Africa a hub for the Swiss pharmaceutical industry in the region.

While Radebe seemed interested in welcoming Swiss drugmakers, there was no agreement on steps to fight HIV infection, which is seen as major constraint for economic growth. Nearly 20 per cent of the South African population over the age of 15 is infected with the virus or has Aids.

Potential

On Monday the Swiss economics minister, on her first official visit to the African continent, held talks with the country’s trade and industry minister, Mandisi Mpahlwa, on ways to boost bilateral trade.

“Both sides agreed there is potential for growth,” said Leuthard.

The trade volume between the two countries stands at just under SFr2 billion ($1.64 billion). South Africa is the most important trading partner for Switzerland on the continent while Switzerland is among the top five investors in South Africa.

As part of her visit to Pretoria, Leuthard and the delegation visited a unique education centre which offers a fully inclusive mainstream programme and provides schooling and training for children with normal hearing as well as for children with a hearing loss.

The school was set up in 2002 and is co-funded by several Swiss companies, including Phonak, which produces hearing devices. It currently has 380 pupils – mainly from poor families – including 70 with severe hearing disability.

swissinfo, Urs Geiser in Pretoria

In brief

Economics Minister Doris Leuthard is leading a delegation of government officials and businessmen on a visit to South Africa and Tanzania this week.

It’s Leuthard’s first official trip to Africa and is aimed at boosting trade and investment with South Africa, Switzerland’s most importing trading partner on the continent.

She has held talks with several government ministers and she also opened a new Business Hub in Pretoria, a service platform for SME’s doing business in the region.

Leuthard is also visiting Tanzania later this week to renew an accord on budgetary support for the government and visit a number of Swiss-funded development aid projects.

Key facts

Swiss exports to South Africa (2006): SFr729.5 million (+30%).
Mainly pharmaceutical products, machinery, medical instruments.
Imports from South Africa (2006): SFr1.261 billion (+13.4%).
Precious stones, including diamonds, precious metals, jewellery and agricultural products.
Direct investment (2005): SFr1.8 billion.
Switzerland is among the top five foreign investors.