THE inaugural flight by South African Airways (SAA) last week from Johannesburg to Abuja, the capital of Nigeria, was a milestone in the relationship between the two powerhouses of Africa, WRITES DIANNA GAMES.
The launch of the route is not just about moving people between two strategic cities; it is symbolic of a greater connectedness between Africa’s two biggest economies that is long overdue.
The launch of the route between Johannesburg and Abuja came 19 years after SAA began flights to the commercial hub of Nigeria, Lagos, in 1998 — a route that became one of the fastest growing in SAA’s history and is still among the top three busiest for the airline in Africa.
In 2011, the SA-Nigeria Binational Commission increased the number of flights from seven to 10 each for both countries.
SAA flies seven times a week to Lagos and the three remaining slots are being used for the Abuja flights. The new route forms part of SAA’s turnaround strategy, and there are early signs of success.
The first return flight from Abuja to Johannesburg last week had a load factor of 67%.
Airline executives believe the route will be profitable in a reasonably short time.
There are many reasons why. First, many people who do not live in Lagos prefer to avoid the city if they can. The airport experience can be trying, with antiquated infrastructure and systems struggling to keep up with growing passenger volumes. Travelling from Abuja is easier and may attract more people to SA.
Second, the Abuja flights will provide a link for trading centres in northern Nigeria, allowing flights not just to SA, but to Southern Africa and to other regions such as Brazil, which has strong commercial ties with Nigeria.
The route will also make it easier for South African investors to connect to Nigeria’s administrative and political centre. What is more, it will facilitate interaction between the two governments.
The political dimension is significant. The choice of Abuja as SAA’s newest destination signals the fact that Nigeria is still an important partner for SA.
This will be cemented by the state visit to Nigeria by President Jacob Zuma in a few weeks.
An airline is an important diplomatic tool and the timing of the new SAA flight is good, coming at a time when there is a real willingness to build stronger ties between two countries that have had a complicated past relationship.
A QUESTION Nigerians often raise in discussions about SA and its West African counterpart is why there are not more Nigerian companies investing here, writes DIANNA GAMES.
Where are the Nigerian banks, the food franchises, the supermarkets and IT companies? they ask. The diplomats are particularly exercised by the trade and investment imbalance. This, they say, reflects badly on the bilateral relationship.
It is true that there are few Nigerian investments here more than 20 years after SA opened its doors to the rest of the continent. Dangote Cement has acquired a cement operation, and oil and gas company Oando has a few, largely inactive, shares listed on the JSE. But there is little else if you don’t count the many small businesses owned by Nigerians resident in this country.
Compare this with the fact that the majority of SA’s top listed companies have a presence in Nigeria. Read more ...
Toothpicks are on the list of more than 40 items for which the Central Bank of Nigeria has forbidden the sourcing of foreign currency through the formal banking system for spending on imports, writes DIANNA GAMES
Published in Business Day SA, 3 August 2015
THERE has been a lot of talk about toothpicks in Nigeria of late. The humble implement for removing elusive morsels of dinner is a culprit in Nigeria’s foreign exchange crisis. It is included in a list of more than 40 items for which the Central Bank of Nigeria has forbidden the sourcing of foreign currency through the formal banking system for spending on imports.
Other items on the list include private jets, tinned fish, vegetable oil, roofing sheets, cosmetics, soap, plastic and rubber products, Indian incense, steel pipes, plywood board, glassware and kitchen utensils.
Although the manufacturing sector’s contribution to Nigeria’s economy has grown from 1.9% in the early 1990s to 6.8%, the country has little to show for years of import bans designed to boost local manufacturing.
WE CANNOT afford to disappoint Nigerians, President Muhammadu Buhari told his party leaders at the weekend, writes DIANNA GAMES.
Published in Business Day SA, 7 July 2015
Mr Buhari was responding to concerns from a nation impatient for signs that their new president has the will and capability to tackle corruption, fight insecurity and instill discipline into the polity.
Just a few weeks into the job, Mr Buhari is battling to get on top of an array of problems plaguing the country, despite bold promises made before the April election that he would move swiftly to build a better Nigeria. He has spent his early days in office fighting fires in his party and in the country.
Last week, it emerged that Mr Buhari may not announce his new cabinet before September — three months into his tenure and nearly six since his election as president.
Muhammadu Buhari may have ben handed a poisoned chalice, having to balance tackling a litany of economic and security problems while satisfying Nigerians' expectations of change, writes DIANNA GAMES
Published in Business Day SA, 25 May 2015
NIGERIA is facing a crisis of expectations as it heads for one of the most auspicious moments in its relatively short 16-year democracy.
The inauguration later this week of Muhammadu Buhari is expected to bring significant change to this large, complex nation.
Not only will Nigeria have a different head of state, it will have a new cabinet and two-thirds of the 36 states will be changing governors after the opposition All Progressives Congress won at the polls this year, displacing the Peoples’ Democratic Party, which had governed Nigeria since 1999.
While this presents an opportunity for a new broom to sweep away much of the rot that has dogged Nigeria’s progress, it’s a formidable task. Read more ...
Dysfunction is fuelled both by powerful vested interests which benefit from the status quo and by millions of people who earn incomes from 'parallel' economic acvities, writes DIANNA GAMES
Published in Business Day SA, March 16 2015
ONE of the biggest complaints about Nigeria from foreign companies is how unnecessarily difficult it is to do business there. The government is not short of grand plans to diversify its economy and politically expedient quick wins but it is less exercised with dealing with the underlying factors that undermine economic development and diversification.
Many of its policies have focused on stimulating local manufacturing to reduce the country’s huge import bills. Over the years it has imposed import bans, slapped high tariffs on a range of goods and tried to pick winners to boost industrial development. But it has failed to simultaneously address the dysfunction that makes it so challenging to operate businesses in Nigeria.
These include a range of illegal business practices that have developed over the years to the extent they have now become part of the fabric of the economy, despite their corrosive and costly effect on development.
The nature of the current crisis is not new for Nigeria. It has been caught out before by crashing oil prices, writes DIANNA GAMES
Published in Finweek, 12 March 2015
Nigeria’s finance minister Ngozi Okonjo-Iweala has tried to put a brave face on the multiple challenges that Africa’s biggest economy now faces in the wake of a plunge in the price of crude oil – the source of 80% of the nation’s revenues.
Late last year, when the damage became apparent, she told the nation not to panic. “Panic is not a strategy. We are managing the situation to keep the economy on a stable sustainable course and we will not listen to those who want us to throw up our hands in despair and give up.” But the indomitable Okonjo-Iweala is shouldering the burden of trying to make ends meet with rapidly dwindling funds.
ON ARRIVAL at my hotel in Abuja last week, I had to make my way past an armoured car, a bomb disposal truck, a mobile hospital, police cars and a dozen or so heavily armed soldiers. After a couple of days, this started to seem quite normal. The same scene was replicated at several other hotels across the city.
It also became normal to drive through empty streets as Nigerians stayed at home in accordance with a government directive for schools, businesses and government offices to shut down for three days to ensure no traffic jams and a smoother execution of the extensive security checks.
It paid off for the Nigerian government. About 1,000 people, mostly foreigners and including 11 heads of state, attended the World Economic Forum on Africa conference — with the notable exception of Brand SA, whose leader reportedly said they could not attend because they could not access security services and guarded transport and accommodation. (My hotel had many empty rooms.)
Their withdrawal spooked some South African executives who also cancelled at the last minute, diminishing an already small South African presence at the high-level event.
The Nigerian government, which had to move quickly to reassure participants after the death of dozens of Nigerians in car bombs leading up to the conference, pulled out all the stops to secure the event.
Nigerian President Goodluck Jonathan told delegates he saw their presence in Abuja as "moral support in the fight against terror".
Nigeria, rather than being on the back foot as a result of the security threat, enjoyed unprecedented attention from global investors, not only as the host of the high-level event, but as the newly-proclaimed biggest economy in Africa. As delegates got down to the business of discussing Africa’s challenges and progress, it was hard to avoid the wall-to-wall media coverage of the kidnapping of more than 200 schoolgirls in the remote northeast of the country by the Islamic fundamentalist group Boko Haram. T-shirts bearing the hashtag "Bring back our girls" were sold around the edges of the summit by enterprising Nigerians and a "safe schools initiative" was launched by the Nigerian government and business with an initial commitment of $20m.
In the past five years, Boko Haram has killed thousands of Muslims and Christians in attacks on schools, churches, buses and homes, but this has gone almost unnoticed by the world at large. Even the kidnapping of the more than 200 girls made the headlines only when there was a sudden drought in international news stories, plus the imminent Africa summit. But the most important factor that turned attention on the matters was the al Qaeda-like video of a maniacal terrorist leader bragging about his plans for the school girls.
When the video came to light it has sparked a level of international outcry that even Boko Haram itself could not even have imagined in its attempts to grab the headlines.
Many Nigerians hope this level of attention on the scourge could be a turning point, particularly given the presence of international troops who are assisting in the search for the girls. And it may well be, given the new commitment to fighting against poverty in areas such as northern Nigeria, partly to address just this sort of security challenge.
Nigeria has fought off many vigilante-type groups off in the past. But given its purported international links, the Boko Haram threat may not be so easy to cut down, and its continued existence will continue to undermine the country’s economic trajectory and growth prospects.
As several speakers said last week, the situation in Nigeria highlights the state of much of Africa — the combination of state failure and success that sit uneasily together in so many countries. Closing the gap is Africa’s real challenge.
• Games is CEO of consulting company Africa @ Work.