Deputy President Phumzile Mlambo-Ngcuka to pay Working Visit to London

Pretoria - South African Deputy President Phumzile Mlambo-Ngcuka will depart for Edinburgh, Scotland on Wednesday 6 December 2006 where she is scheduled to pay a Working Visit to Edinburgh and London scheduled from Thursday - Sunday 7-10 December 2006.

Deputy President Mlambo-Ngcuka's visit to Scotland and United Kingdom comes within the context of South Africa's priority to ensure a faster and shared economic growth through strategic partnership with countries of the North

In this context, the visit is aimed at increasing international understanding and support for AsgiSA and JIPSA while exploring linkages with international education institutions and/or international education experts.

Edinburgh, Scotland (Thursday - Friday 7-8 December 2006)

Deputy President Mlambo-Ngcuka is schedule to hold discussions with the First Minister of Scotland Jack McConnell on Friday 8 December 2006.

While in Scotland Deputy President Mlambo-Ngcuka is also expected to deliver a key note address at the "Going Global 2: The UK's International Education Conference", meet with Scottish Investors and Vice Chancellors of Edinburgh and other Universities in the area.

London, United Kingdom (Saturday - Sunday 9-10 December 2006)

Deputy President Mlambo-Ngcuka will participate in a Business Process Outsourcing (BPO) roundtable. The BPO has been identified as a priority sector for AsgiSA. Over 50 BPO captains of industry will attend the event. The UK remains one of the leading sources of potential BPO direct investment into South Africa.

While in London Deputy President Mlambo-Ngcuka is also expected to hold discussions with representatives of Cape Diamonds Plc, Standard Chartered Bank, Barclays Bank and academic institutions.

Deputy President Mlambo-Ngcuka is expected to return to South Africa on Monday 11 December 2006.

Bilateral Economic Relations

The bilateral trade relations between the two countries have shown an upward trend over the years. It reached 27.8 billion pounds sterling in 2004. In addition, there is a healthy flow of investment in both directions. The United Kingdom remains the largest foreign investor in South Africa and over 200 South African companies have established a presence in the UK.

For the first time ever, South Africa is in surplus in terms of its visible trade with the United Kingdom. The United Kingdom is considered and ranked as South Africa's second biggest export trading partner. Over the past few years the bilateral trade balance between the two countries has shown a steady rise.

The top five export commodities from the United Kingdom to South Africa are: Non-metallic minerals, office machines, road vehicles, telecommunications and sound recording and reproducing apparatus as well as medicinal and pharmaceutical products.

South Africa's top five export commodities to the United Kingdom are: Non-metallic minerals, coal, coke and briquettes, road vehicles, vegetables and fruit and non-ferrous metals. The decline in British exports has been attributed to the strength of sterling, which hashit British export companies. As a result more British companies are looking at joint ventures, arrangements to manufacture under license, or both.

The United Kingdom's Trade and Industry Department is actively encouraging direct investment (currently R144 billion) and joint ventures in South Africa in an attempt to counter the declining British exports to South Africa.

The general aim of this policy is to use South Africa as Regional Hub to export to Africa and Asia. The SA/UK small business partnership programme was launched in 2000. This programme aims to develop business partnership between the UK and South African companies owned and managed by previously disadvantaged groups. Funds from British Trade International and the EU are supporting the programme. Over 50% of total South African exports to the United Kingdom are either precious metals or "unclassified goods".

With about 12 billion pounds worth of investment in South Africa, Britain holds the greatest amount of total foreign investment stock in South Africa, and the acquisition by Barclays of a majority share in ABSA was the largest foreign investment into South Africa ever. British companies employ more than 40% of all those employed by foreign firms. Nine of the top twenty foreign companies in SA are British. It has recently emerged that South Africa is the top commonwealth provider of teachers to the UK, with 4700 teachers having left for the UK since 2001, helping to avert an educational catastrophe in Britain.

SOUTH AFRICAN EXPORTS TO THE UNITED KINGDOM (ZAR'000)

YearSA Exports (ZAR'000)
200532,377,308
200427,869,388
200324,170,332
200227,568,126

The UK is South Africa's 2nd largest export market with an annual growth of 16% between 2004 - 2005.

SOUTH AFRICAN IMPORTS FROM THE UNITED KINGDOM (ZAR'000)

YearSA Imports (ZAR'000)
200520,129,842
200421,125,373
200322,596,969
200225,117,075

Between 2004 and 2005, South Africa's imports from the United Kingdom declined by -4.7%.

TOURISM

South Africa is regarded as a world class tourist destination by British tourists. The United Kingdom is by far our most significant source of (non-African) tourists, a position it has not relinquished for the past 15 years.

According to SA Tourism, the number of tourists from the United Kingdom, from January to October 2002, amounts to 338, 853.

In 2004, a total of 456,368 British tourists visited South Africa and the latest statistics indicate that the figure for 2005 increased to 469,599.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Pretoria
0001

6 December 2006

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