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A flurry of meetings between Saudi Arabia and South Africa over the past year has culminated in discussions about or signed deals worth billions of dollars in Africa’s most industrialised country — and more corporate action is in the pipeline.
The rush of deal-making is part of a broader Gulf drive into Africa, with the United Arab Emirates and Saudi Arabia in particular investing in mining, renewable energy and agriculture.
Mineral-rich South Africa is attracting investors because it’s the continent’s most industrialised nation, boasts developed-world infrastructure and has a bevy of well-run companies at bargain prices compared with firms in other regions.
“There is a disconnect between valuation levels in South Africa compared to other markets, so if you are a strategic investor taking a long-term view — you will see the value and opportunities,” said Ruven Naidoo, head of mergers and acquisitions at Investec Bank Ltd. “We have really high-quality management teams and intellectual property and companies that are very good at what they do, so it’s a good place to look for opportunities.”
Delegations of officials and business leaders have been visiting either country every few months since a 2022 meeting between Saudi Crown Prince Mohammed bin Salman and South African President Cyril Ramaphosa — along with hundreds of businessmen — in the kingdom. It’s resulted in about $5 billion in deal talks and investment in renewable energy, logistics, gas stations and real estate — some signed, some still in discussions. The 10-hour journey between the capitals is becoming so popular that South African Airways is discussing a direct route between Riyadh and Johannesburg. — Bloomberg.
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