Davies, who traveled to Cuba as part of President Jacob Zuma’s state visit to that country, said the debt had become a “hindrance” to trade and economic development between Cuba and South Africa.  It was incurred during the 1990s when Cuba purchased diesel engines from South Africa.

He said South African businesses demanded cash in advance because the Export Credit Insurance Corporation of the Department could no longer insure Cuba's orders as it had exhausted its credit limit.

“We are re-opening the credit lines so that we can start trading actively again,” said Zuma.

Apart from cancelling the debt, South Africa has also offered Cuba credit lines package guarantees to the value of R70 million rand and a further R40 million rand to support Cuba with seeds and fertilizers following the devastating 2008 hurricane which destroyed agriculture. 

About R100 million from the African Renaissance Fund will be made available for purchases from South Africa. It is envisaged that this package will help to boost trade and investments between the two countries which had stagnated. 

South African exports to Cuba had fallen from R82 million in 2008 to only a million rand this year, in 2010. South Africa and Cuba have maintained longstanding relations, dating back to the
struggle

In another landmark agreement, Home Affairs Minister Nkosazana Dlamini-Zuma signed an agreement on the waiver of visa requirements for holders of diplomatic, official and service passports. The agreement entitles Cuban and South African citizens holding such travel documents to enter and remain in the respective countries for up to 90 days without visas.  – BuaNews