A delegation of Nigerian businessmen under the aegis of Nigeria-South Africa Chamber of Commerce was in South Africa recently on a mission to help stimulate trade between the two biggest economies in Africa. Demola Ojo reports
Recently, members of the Nigeria-South Africa Chamber of Commerce (NSACC) departed Nigeria on a week-long trip to Johannesburg and Cape Town. The Lagos-based chamber was inaugurated 18 years ago to encourage trade between both countries and this particular visit was just one of many over the years. However, there was added significance considering it was the first trade mission by the chamber since the leadership change in South Africa with a new President Cyril Ramaphosa – himself a renowned businessman and former Chairman of MTN – at the helm of affairs.
The trade delegation led by chamber chairman, Foluso Phillps, who is also Chairman, Phillips Consulting, included seasoned entrepreneurs like Victor Osibodu, Chairman/CEO Vigeo Ltd; Bode Adediji, who has served as President of the Nigerian Institute of Estate Surveyors; Ebun Sonaiya, whose background is in medical services but now has diversified interests; and representatives of corporates across different industries in Nigeria, from real estate to banking, engineering to law.
There was also representation from different ministries in Ogun State led by Special Adviser to the Governor on Commerce and Industry, Funmi Ajayi, as well as the Director of the Nigeria Investment Promotion Commission, Adeshina Emmanuel.
Members of the delegation were first hosted by the Guateng Growth and Development Authority (GGDA) at the Guateng Investment Centre in Johannesburg, a meeting that also had in attendance numerous South African businesspeople and entrepreneurs, and representatives of the Department of Trade and Industry (DTI).
According to executives of the GGDA present, the meeting, which included multiple presentations and an interactive session, was hosted to help facilitate trade within Africa and to improve the global footprint of Africa, with Nigeria and South Africa playing leading roles. The general consensus, however, was, before these two economic giants could bear the torch for the African continent, they would need to address some burning issues.
First, the issue of trade imbalance between Nigeria and South Africa, which, somewhat surprisingly, is heavily skewed in favour of Nigeria to a ratio of 80-20 approximately.
This is because of the volume (and value) of Nigeria’s crude oil exports to South Africa, which accounts for more than 90 per cent of exports to South Africa. On the other hand, imports from South Africa to Nigeria are a lot more diversified, with manufactured goods and retail services accounting for the bulk of trade.
It was suggested that there needed to be a broader trade base between both countries and, in particular, that Nigeria should diversify the products and services it exports to South Africa, with the acknowledgment that platforms like the NSACC help ignite this quest for diversification of the value chain of trade between both countries.
A particular industry of interest is the solid minerals sector in which South Africa has years of experience due to trade in gold and diamond, but which is relatively in its infancy in Nigeria. The South Africans in the room wanted more clarity on the state of the solid mineral industry in Nigeria which was described as opaque, and bemoaned the lack of South African input, especially considering inroads being made by China, which is a few thousand kilometres further away.
Still on imbalance in trade, it was suggested that Nigeria should buy more from South Africa so that the numbers are more equitable. However, Mr Philips cautioned that the emphasis should be less on balancing the numbers and more on value addition to the products and services being exchanged between both countries.
The chairman of the NSACC elaborated further during another business-to-business meeting between delegations from both countries, this time in Cape Town. It was hosted by WESGRO, the official agency responsible for tourism, trade and investment for Cape Town and the Western Cape.
Phillps stated, “Without a doubt, South Africa’s infrastructure, level of technology, technical competence, manufacturing and so on, are way above Nigeria’s. Certainly, Nigeria is blessed with a lot of resources – oil, mining opportunities, etc.
“It isn’t always just about trade. You can start off with trade but eventually you should be looking to establish a presence in Nigeria.
“The problem with trade is that it’s affected by fluctuating exchange rates,” he said. “It’s a good way to start, to help you establish a brand, but once that is done, you should look to the long term and think of how to begin to manufacture.
“The most successful South African companies in Nigeria are those who add value in Nigeria. Part of your long time view should be how to ensure that what you do in Nigeria involves increasing the local value creation and engaging the people so that there seems to be equity and fairness. It’s less about investing in Nigeria and more about partnering.”
Phillips expatiated further on the concept of partnership over investment. “The people that are here are at the SME level, which is the level I feel, will drive the continent. The big boys will always get on. The Dangotes, the breweries, the MTNs. They will always get on. But the people that offer the employment, that offer the connectivity, they’re the SMEs and the people we see here.
“So when you invite them and say, come and invest in Nigeria, they too don’t have that bulk of money to invest. But what they can do is create value through a partnership.
“Somebody came and asked, ‘where are the big businessmen?’ But a seriously big businessman has no need for a chamber. He’ll move on. He’ll call the banks, the big connections and his transaction is done. But there are many people out there that we have met over the past couple of days who have products to sell and services to render,” he revealed.
Speaking further on the trade imbalance between both countries and how to diversify Nigeria’s exports to South Africa, he countered, “We always fail to appreciate the value of Nigerians working in South Africa itself,” he said. “If I’m working as a doctor, an accountant, a lawyer, a banker, a lecturer, of which we have a huge number of them, and for every one dollar, I remit 40 cents, that’s revenue that is not calculated; diaspora remittances, which itself is a sale.
“Nigeria is exporting its skills and capabilities to South Africa and being paid a net income for it. And the reason why it’s happening is not because of any bullying by Nigeria, it’s because there’s a need for that level of competence and capability.
“Secondly, we tend to concentrate too much on products. How about the service? Our music? Our culture? Our fashion? There are so many things that we don’t look at. In any situation, play to your strengths. These are our strengths as a nation.”
More than anything else, the most important barrier to trade according to participants at both Johannesburg and Cape Town business sessions, was the difficulty in getting visas to visit each other. The consensus was that the two governments were to blame and should look into easing visa restrictions, with many participants recounting bad experiences of passports being held for weeks.
This reporter got a visa to South Africa within a week, which was the good news. The not-so-good news? It was a three-month multiple visa but each stay limited to seven days. This, after multiple visits to South Africa and a series of articles on Durban, Cape Town and Johannesburg, among others.
But this pales into insignificance compared to one of the senior members of the chamber, who even owns property in South Africa but was given the exact same visa treatment.
Participants from both countries agreed that government was the single biggest hindrance to trade.
Things may be looking up though. According to Nigeria’s Consul General to South Africa, Godwin Adama, South Africans who need visas to visit Nigeria can get them within 48 hours.
Adama who attended sessions in both Johannesburg and Cape Town, said, “About three months ago, we rolled out our biometric visa capturing processes in Johannesburg because it is more efficient, information is better documented and it helps in security. We are one of the few countries today that do biometric capturing for visa processing.
“It has enabled us deliver visa faster to South Africans and other foreigners here who want to visit Nigeria. We capture and issue visas within 48 hours except there are local objections.”
He explained steps taken to ensure seamless travel and trade between both countries. “We go about meeting would-be visitors and potential investors in strategic gatherings across the country to intimate them that the visa processing is improved now. Some do not know because they use agents, and these agents are business people who make it difficult to the would-be visitors just to make them pay more.
“With the system on ground, travellers need no longer use agents because they must visit the consulate to have their biometrics captured or no visa. It is longer business as usual,” he asserted.
He added that the recent recession in South Africa had affected trade and the number of visa applications from South Africans but that things have improved now and visa applications have increased alongside the South African economy bouncing back.
Adama also urged caution in the implementation of visa reciprocity, a policy the Nigerian government is guided by.
“It is the issue that we are discussing now at a bilateral level. But Abuja has been very corporative in recent times. Diplomacy is based on reciprocity and we have tried to emphasis it through methods that they will understand, but the truth is that we need more South Africans to visit Nigeria because most of them visiting Nigeria are going for business which cannot be said for every Nigerian coming here. That is why the issue of reciprocity should be treated with some degree of discretion.”
He threw some light on why Nigerians find it difficult to get South African visas. “Some Nigerians occupy good positions here in South Africa. If you remove Nigerian doctors in the South African medical field, the system may not stand well because there are many Nigerians working across several medical professions here.
“In the academia, there are many Nigerian professors in South African universities, and other professionals.
“But there are some Nigerians who have unskilled labour that create some challenges here and these are people that get involved in illicit things.”
He urged Nigerians living in South Africa to be law abiding and follow local practices.
“Staying in a community, there is need for you to stay peacefully and relate effectively with the community in such a way that tension will be reduced. We have paid so many consular visits to see how we can douse tensions and encourage our people to engage in businesses that will not create issues.
“At the same time, there is a problem of perception because many South Africans have not interacted with other Nigerians or visited Nigeria, hence they use the few that are involved in negative things here as a yardstick to judge other Nigerians. They nationalize the crime; crime has no nationality and individuals that commit crimes should be treated as such.
“They should not generalize because in doing that you create negative perceptions that affect the innocent, especially hundreds of Nigerian professionals who are gainfully employed here in South Africa.”
“We have to go back in history to appreciate what it is we should have been doing. What occurred to me very rapidly during my first trip to South Africa 25 years ago was that a union between Nigeria and South Africa would redefine this whole continent totally.” according to Foluso Phillips.
Reason: South Africa comes with world-class infrastructure, technological capabilities and technical skills while Nigeria is a country that is very progressive and had many progressive leaders. “We’re talking about the intellectual capability, the entrepreneurial zeal, the fearlessness of Nigerians coupled with this technology and this ability to achieve,” he said.
Phillips has been in delegations to South Africa for the past 25 years, first under the platform of Phillips Consulting and then as chairman of the chamber for the past six years.
He explained, “When I visited the first time, the First National Bank was the hosts. We brought 20 odd mortgage bankers in the days of mortgage banking. In those days we got our visa on a piece of paper because if they stamp it on your passport, you can’t go into any other country.
“That first trip we were treated like mini-gods: the great Nigeria that nearly brought South Africa to its knees; the great Nigeria that through Obasanjo nationalised BP; and supported so many countries in their fight for independence.”
Over the course of meetings across Johannesburg and Cape Town, there was an agreement that a huge level of ignorance exists on the part of young South Africans on the role Nigeria especially, and other African countries played in their freedom, and that many South Africa freedom fighters as well as professionals were part of the Nigerian society as far back as the 60’s and 70’s.
Some of the older Nigerian participants explained that as youths, they were levied by the Nigerian government to support the struggle against apartheid in South Africa.
Sonaiya recounted that many of his teachers growing up as a student in Nigeria were South Africans. He shared a recent experience when one of his children was excited about a recent collaboration between Nigerian artiste Davido and his South African counterpart, Cassper Nyovest, among many other recent collaborations. Fela Kuti and Hugh Masakela collaborated on music decades ago, he informed.
The conclusion was that both nations need to interact and dialogue on how to bridge cultural gaps, especially by educating the youth on shared history.
It was not all business meetings and presentations. Standard Bank hosted the Nigerian delegation to a dinner at their headquarters in Rosebank, with the wining and dining interspersed with speeches, some sober, many jocular.
South African Tourism also organised tours to the Apartheid Museum in Johannesburg, Mandela House and Vilikazi in Soweto and a Cape Town city tour.
Phillips believes the NSACC has achieved a lot but still has work to do. “Over the years I would say we have managed to bridge the gap (of doing business),” he said. “The obvious ones that you hear are the MTNs, the Standard Banks, Shoprite, DSTV, the days of BOP TV a long time ago. In between, there are many unheard stories of successes and failures. The impact of the chamber has been positive but it should have been a lot more.”