The Norwegian foreign business assistance to South Africa has been a recurring theme in the relationship of the two countries for a while now. The two countries have had a mutual relationship of respect since the early 1950s, with Norway’s policy of direct, constructive interaction throughout the years coming ahead. Norway has had several assistance programs running, that helped the private sector in South Africa become more prevalent, especially since 1994. Since then, some things have changed.
South Africa is seen as more of a middle-income country and a number of nations, including Norway, are seeing it as more of an equal rather than a developing country in need of assistance. As a result, direct business assistance has slowed down, while direct investment and partnerships between the two countries are becoming more prevalent. While the trade, export and import relationships are still at a very basic level, there seems to be potential and definite growth of their relationship. Norway sees South Africa as an interesting entry point into the sub-Saharan economies, as well as a strong partner in the region. On the other hand, South Africa can see the value of a strong relationship with the Nordic country, as a result of which we see a strong relationship developing (source: https://norskcasino.online/).
Investments in the private sector
With the South African economy increasing at a steady pace, it is no surprise that Norway is attempting to invest more into the private sectors in the area. Over the past several years, the number of Norwegian companies registered in South Africa has increased, and so have imports from and exports to the country. This type of slowly developing relationship is very positive for both parties, but a speeding up of the movement would have a positive impact for both of them as well.
South Africa has also seen a significant investment of direct funds into its economy from all over the world as well. Norway participated significantly with that, as they spent years matching the South African investment into themselves and have continued doing so, while also providing loans and direct investment. This has caused the strengthening of the South African economy and an increase in the GDP of the country. Norwegian investment has seen a special surge in the IT, Oil and trade industries while remaining at a steady level in the maritime and other, uncategorized enterprises. It seems that the Norwegian interest in the country is tightly related to the general Norwegian interests around the world.
Effects on the Forex market
Such a steady level of investment over the past few years into the South African economy has been a sort of a vote of confidence for it. The economy has been growing steadily, and with
Norway’s support, so has been the value of the South African dollar. While there are still a number of valleys, it is pretty easy to see the effect that a constant vote of confidence from the Norwegian investment, as the SA dollar has been strengthening in its Foreign Exchange standing over the years. What is most interesting for Forex traders though, is the fact that sometimes the Norwegian investments into certain fields might be a good marker in the strengthening of the SA dollar on the market. Though this is rarely directly or immediately expressed and might take a bit of time to take hold.
What is most interesting is the fact that the two countries are establishing stronger import and export ties between each other. As South Africa becomes more involved in the global trade, especially with highly economically developed countries such as Norway, the more the SA dollar’s standing will increase on the international Forex Markets. While the import and export levels are still sub-1% for both countries in terms of the totals of their exports and imports, the number seems to be steadily growing. This is a good sign for the South African economy and a better sign for the SA dollar. The traders thinking of trading with the currencies of the two countries might want to consider this in their future deals and market orders.