SABMILLER ’s two main competitors in Nigeria, Guinness and Heineken, make nearly as much in that market as SA’s brewing giant makes in 24 other African countries, excluding SA.
This startling fact was disclosed by an SABMiller Africa executive at a recent SA-Nigeria Chamber of Commerce event. He maintains that for all the challenges of the Nigerian market, if companies do not have a Nigeria strategy, they do not really have an Africa strategy.
SABMiller entered the highly competitive Nigerian beer market last year with the purchase of a small brewery in Rivers State in the Niger Delta. The executive said if the company had to do it again it would enter Nigeria sooner. The CEs of South African companies still pondering if a Nigeria strategy is a good idea may want to digest this.
SA and Nigeria recently marked 10 years of the SA-Nigeria Binational Commission (BNC). There is much to celebrate, including the fact that in the past decade, many of SA’s biggest firms have moved into Africa’s biggest market. They include Shoprite , Rand Merchant Bank , Old Mutual , Sanlam , Liberty Life, Sasol , MultiChoice, Standard Bank , Dimension Data and , of course, MTN. Two-way trade has risen from R1,7bn in 1999 to R22,8bn last year.
Undoubtedly, the BNC has been a positive force. Many agreements and protocols have been signed — 22 out of the 33 under discussion, according to Nigerian Vice-President Jonathan Goodluck’s speech at the BNC meeting in Abuja last week.
It is a pity then that 10 years after this important relationship was formalised, it is still dogged by problems.
The issue of visas raised its ugly head at the 10th anniversary celebrations in Abuja, taking the gloss off the occasion. The South African presence at a business forum attached to the BNC meeting was reduced by the difficulty of getting visas as a result of a stricter visa regime recently introduced by the Nigerian government.
The formerly smooth visa procedure has become cumbersome. It now takes several weeks to process a visa, from one week previously and a refundable deposit of R6000 has been introduced for first-time visitors.
It seems the new regulations are in response to the difficulties Nigerians have experienced over the years in obtaining South African visas. The stories are legion about the conditions applicants have to endure during long waits for visa interviews, the weeks it can take for visas to be issued and the repatriation fees for would-be visitors.
The South African missions in Nigeria are vastly understaffed. Their size of the missions has hardly changed in a decade despite a big increase in trade and overall movement of people between the countries.
The BNC recently negotiated a near doubling of flights between Johannesburg and Lagos but seems not have addressed the rising demand for visas that such increased traffic implies.
The issue is thorny as any country wants to regulate the flow of people across its borders. But Nigerians say the people most affected are those with legitimate business interests in SA.
There are other issues such as nationalistic perception problems on both sides, which refuse to go away despite rapidly increasing contact between people from the countries.
Both vice-presidents raised the matter of the trade imbalance between the nations at last week’s BNC meeting. SA’s Kgalema Motlanthe said trade was in Nigeria’s favour (SA imported oil worth R15bn last year while SA exports were just under R8bn), while Goodluck said the trade balance was in SA’s favour — which it is if you strip oil out of the equation. Nigerian business people complain about discrimination and exclusion in SA. But there are many market-related reasons for this imbalance as well. The issue is complex.
Overall, there is great potential mutual benefit in this relationship, which the politicians seemingly recognise. It is a pity then that only two South African ministers were seen at the Abuja business jamboree — and one a deputy minister at that.
The weakness of the BNC, though, is perhaps that after 10 years of rhetoric, backslapping and photo opportunities, people on the ground are still arguing about visas. The lack of consultation with business and other stakeholders in the relationship might well be the cause of the politicians being so out of touch.