President Thabo Mbeki Arrives in Rome for State Visit

Tshwane- South African President and Mrs. Thabo Mbeki have arrived in Rome today 21 March 2006 ahead of a State visit scheduled for Tuesday to Thursday 21-23 March 2006. The Presidential Delegation includes Ministers Dr Nkosazana Dlamini Zuma, Mandisi Mphahlwa, Mosibudi Mangena, Director General of Foreign Affairs Dr. Ayanda Ntsaluba, Political Advisor Titus Mofolo and Legal Advisor Adv. Mujanku Gumbi as well as a large business delegation.

President Mbeki's visit to Italy comes within the context of South Africa's priority to strengthen relations with countries of the North with a view to faster and shared economic growth while consolidating the African agenda and promoting the agenda of the South. Critical to note is, Italy is also a member of the G-8 and the European Union.

Issues on the agenda of discussions between President Mbeki and Italian President Carlo Azeglia Ciampi on Tuesday 21 March 2006, are expected to include, among others:

• The status of bilateral political and economic relations between both countries;
• Peacemaking and conflict resolution in Africa with particular reference to the situation in the Democratic Republic of Congo, Sudan and other countries in the Horn of Africa, and Côte d'Ivoire;
• The outcomes of the World Trade Organisation Talks in Hong Kong in December 2005; and
• Other international issues of mutual concern.

President Mbeki is also expected to hold discussions with Prime Minister Silvio Berlusconi, the Mayor of Rome Walter Veltroni and the leader of the opposition coalition Romano Prodi.

In addition President Mbeki is expected to interact with top business executives during his visit, and lay a wreath at the Tomb of the Unknown Soldier.

President Mbeki is expected to return to South Africa on Friday, 24 March 2006.

BILATERAL ECONOMIC RELATIONS

Trade

Italy ranks amongst South Africa's top ten trading partners. South African exports to Italy are dominated by precious and non-ferrous metals; basic iron and steel and ferro-alloys; coal; and quarried stone/granite.

Some value added SA products are increasingly penetrating the Italian market, including processed and preserved fish and fish products; manufacture of other general purpose machinery; production, processing and preserving of meat and meat products; preparation and spinning of textile fibres; fruit and vegetable crops; market gardening; horticulture; tanning and dressing of leather; pulp, paper and paperboard; basic chemicals.

South African imports from Italy consist mainly of machine tools, auto vehicles and components thereof, industrial machinery, jewellery and telecommunications equipment.

In 2004 total trade between South Africa and Italy amounted to € 3.157 billion (+23% compared to 2003), with the positive trade surplus (for South Africa) of € 862 million (ISTAT - Italian Central Institute of Statistics). The latest figures available until November 2005 show a strong growth in South African exports, especially in the precious metals sector.

South African exports to Italy are still dominated by precious and non-ferrous metals and coal. In 2003 the three sectors below accounted for 68% of SA exports while in 2004 it had risen to 76%. Statistics for January to November 2005 indicate a further growth in SA exports of precious and non-ferrous metals.

An export initiative is being undertaken to increase the volume, value and products spread of South African products in COOP Italia. This is the leading retail group in Italy with a market share of 17.7%, and imports fish and agricultural products from South Africa.

Senior Managers and buyers from COOP Italia are expected to visit South Africa in the coming months to meet producers of identified products, to be followed by a marketing initiative.

Investment

Italian Investment in South Africa

Prior to 1995, investment flows from Italy to South Africa were negligible as compared with other major industrialised countries. The situation, however, changed significantly in 1997 and 1998 when Italian companies invested R 127 million and R 668 million respectively, ranking 3rd as South Africa's investment partner.

According to the latest statistics available, investments from Italy to South Africa amounted to € 38.5 million (R 302 million) in 2004 and € 5,2 million (R 44 million) in 2003.

An evaluation of the Italian economy led to the identification of the following sectors for investment promotion purposes:

• Agro-processing
• Textiles and Clothing
• Leather and Footwear
• Furniture
• Automotive
• Tourism
• Jewellery
• ICT

Principal Italian Investors in South Africa:

Potential Investors

• Ferrero: two projects
• Hazelnut growing - Itemba project
• Kinder United of the World
• Paggio
• Diamonds, gold and platinum beneficiation partnerships

Italian Support for peace building and conflict resolution

• In Somalia the Italian government continues to support the Intergovernmental Authority on Development (IGAD). Italy also intends to contribute to the economic and social revival of the country.
• In Sudan, together with the United Kingdom, the United States and Norway, Italy has observer status in the peace negotiations being held under the auspices of IGAD.
• In Ethiopia and Eritrea, Italy has participated in the UNMEE (United Nations Mission for Ethiopia and Eritrea) force. Italy contributed to the United Nations Trust Fund which determined the delimitation and demarcation of the border between the two countries.
• In the Great Lakes region, Italy hosted the mediation efforts by the St. Egidio community for the repatriation of the Interahamwe (FDLC) from the DRC to Rwanda. A ceasefire agreement, with an attached time-frame was signed on 1 April 2005.The Italian government believes that the Rwanda government should be encouraged to give more positive signs that it would support the repatriation and resettlement of the FDLC. The UNSC has called upon the government of Rwanda to submit a list of names of those believed to have been responsible for the genocide in 1994. Italy contributed Euro 1.5 million to the World Bank Trust Fund for the Great Lakes three years ago. It is considering further financial support for the resettlement of about 10 000 militants with their families, an estimated 40 000 persons, to the amount of Euro 400 000 to 500 000.
• In Burundi, Italy has supported the AU peace mission, whose main task is to encourage respect for the Arusha Agreements of August 2000.
• In Northern Uganda, Italy has adopted various initiatives in an attempt to encourage a negotiated solution to the conflict, and views the conflict as a potential destabilising influence on the entire Great Lakes region.
• In Liberia, Italy participated as moderator in the talks held in Accra under the auspices of Economic Community of West African States (ECOWAS) which led to the comprehensive peace agreement of 18 August 2003. Italy has also made a financial contribution to the maintenance of the peace contingent of ECOWAS employed in the peace-building process in Côte d'Ivoire.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Tshwane
0001

21 March 2006