JOHANNESBURG, South Africa is fostering closer trade relations with Mozambique, the country’s eastern neighbour and one of the fastest growing economies in sub-Saharan Africa, says Trade and Industry Minister Rob Davies.

Addressing the Mozambique Economic and Social Forum (MOZEFO) Conference in Sandton, near here, Tuesday, Davies said stronger trade ties with Mozambique would boost growth and add value to both countries. Mozambique is a strategic and important trading partner for South Africa, he added.

We are partners in this journey towards continental and developmental integration. As we create a larger regional market, eventually culminating in a continental market, we have to do it in a way that is going to support the economic diversification and industrialisation of our countries, said Davies, who stressed that it was important for both countries to move away from being only producers of mineral commodities.

Only by moving away from being proud producers of mineral commodities can we add value, move up the value chain and diversify our economies. It is the only way to raise the living standards of our people and promote greater economic inclusivity, he said.

He noted that the Southern African Development Community (SADC), of which both countries are members, was on a journey towards implementing the SADC Industrialisation Strategy and the region had to come up with an implementable industrial action plan.

As we work on regional integration and diversification of our economies, infrastructure development is critical in areas such as energy, power, transport and the improvement of urban infrastructure. These are all central pillars to us promoting developmental integration, said Davies.

Both South Africa and Mozambique have been involved in a number of initiatives to promote greater economic contact and joint activities. South Africa has taken a number of trade missions to Mozambique and regularly exhibits at the Maputo International Trade Fair (FACIM) to facilitate a stronger economic relationship with Mozambique. This is part of the South African government’s efforts to mobilise outward investments into the African continent by South African companies.

At this stage, there are 35 foreign direct investment projects by South African companies in Mozambique, with a total investment value of 122 billion Rand (about 9.45 billion US dollars). These investment projects have created over 11,000 jobs in Mozambique, said Davies.

Both countries have established a number of government-to-government agreements to enhance trade and investment. Some of the ongoing work in this regard pertains to the 2005 Memorandum of Understanding (MoU) on Economic Co-operation, which needs to be reviewed and updated. The MoU, in particular, needs to cover new areas in investment, infrastructure and industrial development, said Davies.