If SA and Nigeria want to see their economies grow, both nations need to work towards improving the ease of doing business in their respective countries.
This is the view of trade and industry minister Ebrahim Patel, who was speaking on the sidelines of a Nigeria-South Africa business forum taking place at the Hilton Hotel in Abuja on Wednesday.
Patel is part of a delegation accompanying President Cyril Ramaphosa on a four-nation state visit which includes Ivory Coast, Ghana and Senegal.
During the bilateral talks between the two presidents, it is expected that a number of deals and memorandums of understanding across political, diplomatic, economic and trade relations will be concluded.
Patel said the business forum was about getting the views of individual business people in ICT, infrastructure, finance and banking on how to improve economic co-operation between the countries.
“The one key metric of economic development is the level of trade between countries. Nigeria is today SA’s biggest supplier of oil. Historically, it was at about 20% and it has now grown to about 42%.
In addition to that, he said SA was a fairly significant supplier of things like polymer and polypropylene to the Nigerian market, some food products as well as, increasingly, machinery.
“The question for us is how can we enable development in both countries? It is not a zero-sum game because SA’s growth does not have to be at Nigeria’s expense. That means that it needs the legal regime that allows it and requires the policy co-ordination.”
The legal regime was set up largely through the African Continental Free Trade Area while the relationship part was what Ramaphosa’s visit was all about.
“It’s the political leadership of both countries recognising that if we can unlock the obstacles and challenges, then both countries can grow. We have heard about the enormous challenges Nigeria faces with unemployment and low growth and those are the exact challenges SA faces.”
Patel said when people visit supermarkets in both countries there are many products that are manufactured in other parts of the world. “Of course we want to be part of the global trading system, we don’t want to disengage in trading with the world but Africa can produce more of what it needs.”
On SA businesses exiting the Nigerian market due to various reasons, Patel said: “SA has raised in discussions with Nigeria that both countries need to find ways of doing business, that there needs to be more predictability with the regulatory regimes and that it should be easier to identify products from each other’s countries that are imported and exported.”
Furthermore, there needs to be protection from the rule of law. “Businesses must be entitled to repatriate dividends and one of the specific areas that the South African businesses have raised as a challenge is the difficulty in importing goods from SA given that there is a list of restricted products.
“Our Nigerian colleagues have been very open about the opportunity for SA to identify products that should be removed from the list and we will be submitting those products.”
Likewise, Nigerian business leaders have raised concerns about the difficulty of the visa regime in SA. “They have identified the difficulties of legitimate business people coming to do business in SA on business trips and we are working now on a new arrangement that will make it easier for SA to identify ways of resolving those challenges.”
This, he said, would be done respecting the policy positions of both countries.
Standard Bank SA CEO Lungisa Fuzile told TimesLIVE that often well-established South African businesses, particularly in the retail sector, set up shop in Nigeria and then are forced to disinvest 10 years later when they face challenges.
Fuzile said it was the responsibility of the South African government to establish the root causes of that.
“Given the interests that both countries share, which is to encourage investments both ways, job creation in both countries and just making sure that the countries prosper, you want to make sure that when an investment takes place, it is never reversed.”
He said the visit by Ramaphosa, ministers and the business delegation presents an opportunity to discuss the opportunities that the two countries’ economies present, matters that will ensure that where businesses from the respective countries seek to take advantage of opportunities, they can do that easily and quickly so that investments can take place.
“We simply do not do enough business between our two countries and among ourselves as African countries.”
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