Trade, Industry and Competition Minister Ebrahim Patel has emphasised that Nigeria is a critical market for South African capital and goods while South Africa is a big market for Nigerian businesses.
Minister Patel who forms part of a delegation accompanying President Cyril Ramaphosa to on a West Africa four-nation visit, was speaking on the sidelines of the South Africa - Nigeria business forum on Wednesday.
Speaking to SAnews, Patel said the forum is aimed at creating a platform for South African companies to engage and exchange business contacts with their Nigerian counterparts to forge joint venture partnerships.
“The business forum was about getting the view of individual business people identified in the areas of ICT, infrastructure, finance and banking on how we can get greater economic cooperation between the two countries.
“The one key metric of economic development is the level of trade between countries. Nigeria is today South Africa’s biggest supplier of oil and historically it was at about 20% and it has now grown to about 42%.”
He said South Africa is a fairly significant supplier of polymer and polypropylene to the Nigerian market as well as some food products, among others.
“The question for us is how can trade relationship enable development in both countries? It is not a zero-sum game, not that South Africa’s growth has to be at Nigeria’s expense. That means that it needs the legal regime that allows it and requires policy coordination.”
The Minister said the legal regime was done largely through the African Continental Free Trade Area while the relationship part was what the State Visit by President Cyril Ramaphosa 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 that Nigeria faces with unemployment and low growth and those are the exact challenges that South Africa also faces,” Patel said.
He said when people visit supermarkets in both countries there is a large number of 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.”
The Minister also spoke on the occurrence of South African businesses exiting the Nigerian market due to various reasons.
“South Africa 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.”
Speaking on challenges faced by South African businesses in Nigeria, Standard Bank CEO Lungisa Fuzile told SAnews that often some of the well-established South African businesses, particularly in the retail sector, set up shop in Nigeria and later on are forced to disinvest when they face challenges.
Fuzile said it was the responsibility of the South African government to try and establish the root causes of that.
“Given the interest 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,” Fuzile said.
Fuzile said the visit by the President and his Cabinet along with the business delegation presents an opportunity to discuss the opportunities that the two countries present.
“We simply do not do enough business between our two countries and amongst ourselves as African countries,” said Fuzile. – SAnews.gov.za
