SOUTH AFRICA GROWING BIGGER IN NIGERIA

Posted by Olaniyi Abodedele on Sunday, April 6, 2014 Under: Our Headline Articles



The growing presence of South Africa’s corporate organizations and commercial ventures in Nigeria could best be understood through the words of Nigeria’s foremost industrialist, Aliko Dangote who affirms that “Nigeria is the best kept secret in the world. Anybody who doesn’t invest in Nigeria only has himself to blame, going forward, if he misses out.  I don’t really know of any place where you can make as much money as you make in Nigeria.”
Dangote’s words are incontrovertible being Africa’s richest man and the 23rd richest man in the world; he surely knows what he is saying. Therefore, commercial invasion of Nigeria by South Africa in the last decade is best explained in the light of his insight about his home country, Nigeria.

Interestingly, the African richest man is not alone in his opinion about Nigeria’s pivot position in Africa’s economy. Michael Vincent, director at Monitor Deloitte puts it as this: “if you want to play outside South Africa you have to be in Nigeria because the populous West African country beats other nations in Africa "hands down" when it comes to foreign direct investment (FDI). Michael, quoted in Mark Allix’s Business Day article of 7th February 2014; suggests that “Nigeria should be on radar for SA’s firms. I’m seeing a lot of global companies coming into Nigeria."

Undoubtedly, Aliko Dangote and Micheal Vincent’s opinions firmly confirm the reality about the South Africa- Nigeria business relations. The last decade has witnessed a gradual but forceful entrance of South African companies into the key sectors of Nigeria’s economy such as aviation, banking, construction, entertainment, revenue, telecoms and retail chains. These are evident in the strong presence and successes of such companies as MTN who now reign like a colossus over the Nigerian telecommunications industry.  Multichoice (DSTV) is now king of pay-TV in Nigeria. Also, Tiger Brands is now a dominant force in Nigeria’s food business having acquired majority shares in UAC Foods and Dangote Flourmills.

Officially, the growth and impacts of South Africa’s presence in Nigeria’s economy is not lost on the leaders of both countries. The Consul-General at the Nigerian Consulate in Johannesburg, Hon. Okey Emuchay (MFR) noted at a welcome dinner for the Speaker of the Nigerian House of Representatives Hon. Aminu Tambuwal on the 3rd of September 2013, that “there are 152 South African companies which are active in our economy as at today and more are still coming. This rush shows that there is something in Nigeria that is attracting them.

In the same vein, South African President, Mr. Jacob Zuma said during President Goodluck Jonathan’s of Nigeria state visit to South Africa on the 7th May 2013, in his welcome speech (as reported by City Press) that, “to date, over 100 companies are doing business in Nigeria, with the biggest investment being in the telecommunications sector,” Last year South Africa received 73, 282 Nigerian tourists, which was a 13.8% increase compared with 64, 402 Nigerian visitors in 2011”.

“Our records indicate that Nigerian tourists contributed a total of R720 million to the South African economy last year. To boost tourism links further, South Africa is in the process of opening a tourism office in Lagos.” said Zuma

As a result, Zuma urged South Africans to also visit Nigeria and explore “this sister country, which has historically played a prominent role in the continent and in world affairs”.
Like Zuma, Nigerian Consul-General, Hon. Emuchay also advised “Nigerian businessmen to take advantage of the business opportunities in South Africa and bridge the gap to grow our economy through competition.”

Moreover, there are so many firms which are fast becoming Nigerian brand favourites, but they are actually South African brands. Good examples include;  Chicken Republic; Critical Rescue; Defresh Products; Entech and Broll; Eskom; Global Outdoor Semces; Grinaker-LTA Construction; Massmart (Game); Oracle Airtime; Mr. Price; Nandos; Protea Hotels; SAB Miller; Sasol; Shoprite, South African Airways; Stanbic IBTC Bank; Standard Chartered; St. Elmos; Truworths; Umgeni Water and Woolworths to mention a few.

Consider this: in 1994, South African companies made a paltry $11 million in Nigeria.  By 2005, they made a whopping $11 billion. On the flip side, the Nigerian economic presence in South Africa is insignificant. 

According to statistics provided by the Nigerian Communications Commission (NCC), MTN stands head-and-shoulder above the rest communication companies with as many as 55 million subscribers; Globacom comes a distant second with 25 million; Airtel comes third with 21 million; and Etisalat is fourth with 15 million.  Currently, there are over 115 million mobile-phone users in Nigeria, a figure more than double the entire population of South Africa which is 52 million; Nigeria has become MTN’s biggest cash cow.  The company now makes over $2.5 billion in profits annually from Nigeria alone. 

Shoprite’s retail outlets stores are another major South African businesses that have gained ground in Nigeria. Shoprite CEO, Whitey Basson, said he saw the scope for 700 Shoprite stores in Nigeria alone, up from the current fifteen, arguing that even if 60 percent of Nigerians live in poverty, the other 40 percent would still outnumber South Africans By Reuters in Business report of February 12 2012.

Another South African flagship in the Nigerian economy is Multichoice (DSTV), which accounts for over 90% of the viewers of satellite TV and enjoys unparalleled monopoly in the sector.  By end of 2013, DSTV has an estimated 2.3 million subscribers in Nigeria alone out of its estimated total 5.2 million Subscribers on the African.

Conclusion:

This is not a call to discrimination against South African firms; we like our South African brothers and sisters, rather it is a clarion call to every Nigerian especially those in South Africa to wake up, and stop the champagne party in night clubs and slow down on the women chasing, we need to unite, support each other, and the Nigerian brand to grow in unity. 

I am challenging Nigerians to rise to the challenge South African has shown by their commercial exploits on Nigerian turf.  Nigerians need to realize that there is already underway a South African play for Nigeria, and this challenge is not simply at the level of the Super Eagles and Bafana Bafana where we have always reigned supreme. 

South Africans are in Nigeria, and they are there with a purpose.  They are there to utilize the opportunities available in the Nigerian economy.  At the moment, we seem to have been lulled into a widespread and deepening surrender.  We must neither ban South Africans nor impede them.  But we must match them ideas for ideas, impacts for impacts and dollars for dollars. 

This is also a clarion call to authorities in Nigeria to emulate South African authorities in the areas of laws and legislations that give priority and concessions to its citizens over foreign investors particularly in the areas of local and international business practices.

Given the profitable and peaceful business atmosphere enjoyed by South African business organizations in Nigeria, it is fair that companies such as MTN, Multichoice, Shoprite, Standard Bank and others commit to community social responsibility initiatives for the Nigerian community in South Africa.

For the reasons above and for the purpose of peaceful co-existence among South Africans and Nigerians in South Africa, it will be beneficial if the South African government creates forums to educate its citizens about the roles Nigeria played in their freedom, and on the mutually beneficial commercial interests between Nigeria and South Africa. It is believed that this will go a long way in reducing xenophobic attitudes about Nigerians being pest in South Africa’s economy. 



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