Partnership aims to boost economic collaboration in key sectors including agriculture, renewable energy, and ICT.
In a significant move to bolster trade relations between the Western Cape and Portugal, Wesgro, the official tourism, trade, and investment promotion agency for Cape Town and the Western Cape, has signed a memorandum of understanding (MOU) with Agência para o Investimento e Comércio Externo de Portugal (AICEP), the Portuguese government agency responsible for attracting investment and promoting export growth.
The MOU aims to develop trade and economic relations between Cape Town, the Western Cape, and Portugal by promoting projects in sectors of mutual interest. These include agricultural production, renewable energy, professional services, biotechnology, the medical-pharmaceutical industry, information and communications technology, logistics, and water and sanitation. This cooperation could manifest in joint efforts to organise exhibitions, buyer-seller meets, symposiums, seminars, workshops, and product sample displays.
"Portugal and South Africa enjoy cordial relations, and this MOU represents a significant step forward in deepening our economic ties," said Wrenelle Stander, CEO of Wesgro. "The Western Cape is open for business. This agreement with AICEP is crucial for attracting, facilitating, and supporting foreign direct investment (FDI) into our province while expanding our presence in international markets. Strong, mutually beneficial partnerships are essential for leveraging opportunities to accelerate economic growth and create much-needed jobs," she added.
South Africa and Portugal enjoy robust bilateral relations, with prominent Portuguese firms such as logistics companies Rangel Group and Transitex operating in the country. Tourism between the two nations has also seen substantial growth in recent times, with over 16,000 Portuguese tourists visiting South Africa in 2022, marking a 172.10% increase from 2021. The Western Cape welcomed 5,488 Portuguese tourists in the same year, a 151.74% increase from 2021, and a 42.13% recovery compared to pre-pandemic levels in 2019.
Citrus fruits were the Western Cape's leading export product to Portugal in 2022, valued at R426.21m and accounting for 41.85% of the province's total exports to the European nation. An estimated 38.56% of South African citrus fruits shipped to Portugal in 2022 originated from the Western Cape. South Africa's exports to Portugal in 2022 totalled R3.41bn, a 20.43% increase from 2021, while imports from the Iberian country amounted to R6.19bn, a 33.85% year-on-year rise.
The MOU sets the stage for a broad spectrum of activities, including the exchange of non-confidential economic and commercial information, promotion of joint ventures, and the organisation of trade fairs and exhibitions. Both parties are committed to building mutually beneficial relationships, particularly for small and medium-sized enterprises in both regions.
Financial and resource commitments for specific projects and activities under the MOU will be mutually agreed upon, with each party bearing its own costs. They will also seek financial support and donations from national and international organisations and partners as needed. The MOU will be in force for an initial period of five years, with the option for renewal by mutual agreement.
"This partnership establishes a strong foundation for improved economic relations and expanded business opportunities between the Western Cape and Portugal. This collaboration is poised to deliver substantial benefits, driving economic growth, innovation, and mutual prosperity," said Stander.
The City of Cape Town's Mayoral Member for Economic Growth and Tourism, Alderman James Vos says: "Speaking from the City's perspective, we warmly welcome the new partnership between our region and Portugal. Our shared history and cultural connection provide a strong foundation for this collaboration, which promises to create significant economic opportunities. By enhancing the flow of products and services, we will strengthen travel and trade, aligning perfectly with our City government's mission to expand market access and drive economic growth. I am also hopeful that this economic partnership will lead to the establishment of a direct flight, making business interactions more convenient. We must collectively work towards this goal to maximise the benefits of our partnership."
Commenting on the historic agreement Western Cape Minister of Agriculture, Economic Development and Tourism, Dr Ivan Meyer, said: "The Western Cape Government believes in partnership and collaboration. This is an exciting opportunity which creates the platform for business to have strong access to domestic and international markets, and increase tourism and exports."