Items filtered by date: October 2019

SA and Nigeria are open for business, President Cyril Ramaphosa said at the business forum that took place on the sidelines of the state visit by his counterpart Muhammadu Buhari last week.

This remark, platitudinous under most circumstances, had resonance at the event last week in Gauteng, given the hostility and condemnation of SA in the lead-up to Buhari’s visit, after the recent attacks on Africans from other countries, including Nigeria, by some South Africans.

As Ramaphosa said in his new weekly newsletter, some people had expected the visit to be “tense and difficult” after the attacks. But, he said, it turned out to be an extremely successful visit, cementing the relationship between the two countries and finding that “we are of one mind” on how the continent’s two largest economies can play a role in building intra-African trade and leading continental initiatives.

Though deemed by many to be essential for the growth of Africa, the political relationship between the two big powers has drifted over the past decade, leaving a vacuum in continental leadership. Political statements during the visit suggested the current presidents are keen to reoccupy that space not just through greater collaboration, but by tackling issues that have seen increasing turbulence in a once close relationship.

Key among these is the ad hoc but regular attacks on Nigerians and other Africans resident in SA. This is a tough one, given the complex array of factors that play into this violence. But there is a new effort to implement the “early warning” mechanism first mooted after similar violence in 2017, which failed to gain political traction.

The intention is to share information, co-ordinate efforts and prevent a recurrence of the recent attacks. The latest plan may fare better, given the circumstances in which it was forged.

Visas, always on the agenda of bilateral meetings, are still high on the list of issues raised by citizens of both countries, who, with some exceptions, are mostly still getting three-month visas to travel to each other’s countries, despite proclamations of the strategic nature of the relationship.
Another initiative announced last week was the establishment of a joint ministerial advisory council on industry, trade and investment. This new structure, which is to be launched early in 2020, will enable the facilitation of bilateral business and, where necessary, address problems.

Again, the idea is not new. Several high-level business councils have been announced during state visits in the past but have also not been activated, running adrift on minor issues and lacking champions between presidential engagements.

The reality that business is the real driver of SA’s African engagement, and the first in the line of fire when things go wrong has given greater impetus to this initiative.

Bilateral trade in 2018 reached R50bn and Nigeria accounts for 64% of SA’s trade with West Africa. The country is SA’s 10th biggest export destination in Africa.

There are more than 100 companies, including some of SA’s biggest listed enterprises, invested in Nigeria, and many more are trading with the country and engaged in other types of business.

SA also imports 26% of its oil from Nigeria, highlighting Abuja’s strategic importance to Pretoria.

The profile the other way around is very different, characterised by people-to-people relations rather than investment. There is only one large investment from Nigeria — Sephaku Cement, a company owned by Nigerian billionaire Aliko Dangote — and one Nigerian company listed on the JSE, oil and gas conglomerate Oando.

Some up-and-coming ICT businesses have a presence here as well, but most Nigerian companies in SA are small enterprises owned by Nigerian residents and citizens based in SA rather than investors from the West African country.

The dearth of large Nigerian investments in SA is a complex issue that speaks in part to a trust deficit — Nigerians don’t want to take their money where they don’t feel welcome.

Many believe SA is highly regulated and difficult to operate in and there is little low-hanging fruit. Other African countries, particularly those in West Africa, offer much greater market advantage and a more familiar business environment. Nigeria itself, a market of 200-million people, is the biggest market of all, soaking up almost everything on offer from inside the country.

But the unequal business relationship has become a political hot potato that SA is keen to address. It is not just issues of security and crime that need to be at the forefront of efforts to attract money from Nigeria and other African countries. The issue is also about addressing perceptions that SA is closed for business when it comes to other African countries in terms of entry requirements, not just for people, but for African products.

The SA-Nigeria relationship is stuck, and it needs all hands on deck to change; to introduce a more positive narrative and to find new ways of working together. It needs an acknowledgment by South Africans that crime is about criminals, not about nationalities.
The recent hostilities appear to have created the space for a change. Discussions in and around last week’s business event were frank and open between businesses from both countries. The adage, “never waste a good crisis”, became a mantra of the engagement.

Ramaphosa was upbeat when he arrived at the business forum in Midrand, giving assurances that the two governments were in a strategic relationship with commitment at the highest levels to manage any future crises in a co-operative and collaborative manner. He urged the several hundred people present to “turn contacts into contracts”, saying roadblocks to trade and investment will be identified and tackled.

Many of the statements and promises sound familiar. State visits are designed to showcase the best intentions of participants to deal with long-standing issues.

But this might be the best chance there has been in a long time to take this strategic, albeit challenging, relationship forward.

• Games, an African business analyst, is a director of the SA-Nigeria Business Chamber but writes in her personal capacity
Illustration: Karen Moolman