“From the vantage point of the trade balance, South Africa always had a negative trade balance with the Kingdom of Saudi Arabia. This ranged from a deficit of about R23 billion in 2007 when the credit crunch hit to a deficit of R29 billion in 2011.

“There is no doubt that the level of our bi-lateral trade is far below potential and is also concentrated in a few sectors like oil and gas, raw materials and fruits and vegetables. This points to a need to diversify our baskets of goods traded,” he said.

More value added and diversified trade would benefit both countries as it will lead to job creation, which was one of the single biggest challenges at present, Davies added.

The two countries agreed that the level of investment was far below potential and undertook to work together to explore several initiatives to address the situation.

“To this end, the launch of the South African – Saudi Arabia Holding as an investment holding company is welcomed, as it will accelerate the development of investment opportunities in the identified sectors to the amount of R10 billion.

“This joint venture is a creative and practical mechanism by the private sector to look at large scale projects in agriculture, mining and infrastructure,” he said.

The two countries committed themselves to strengthening relations through closer and focused cooperation in areas such as infrastructure development, agriculture, mining and energy, tourism, arts and culture, transportation, environment, standards, amongst others.