CAPE TOWN: Nigeria and South Africa admitted their chemistry was “not right”, and that their differences needed to be resolved if they were to continue anchoring Africa’s recent growth boom.
The continent’s largest two economies were recently at odds in the often-testy relations following what Nigeria said was the targeting of its nationals in xenophobic attacks in South Africa earlier this year.
“The relationship is not right. We need to work harder to get Nigeria and South Africa to love each other, the chemistry is not right,” Foluso Phillips, the chair of the Nigeria-SA chamber of commerce said at a side event of the World Economic Forum on Africa that is coming to a close in Cape Town, South Africa.
Dealing with the rancour would significantly help increase bilateral investment in their economies, speakers said.
The two countries held the key to region’s economic growth, Phillips said. “Ignore the others, it is Nigeria and South Africa that make things happen in this continent.”
South Africa’s High Commissioner to Nigeria, Lulu Louis Mnguni, however sought to downplay the rift, terming the differences as steeped in normal rivalry.
“South Africa and Nigeria have very good relations. Yes there are differences but these are non-basic and competitive,” he said.
“We cannot rule without each other. South Africa is not threatened by Nigeria’s success because our successes are interlinked,” said Mnguni.
The two countries share major economic ties—the chamber in 2014 had a membership of 315 companies, while bilateral trade in 2012 reached $3 billion.
While Nigeria absorbs 40% of South African exports into the region, the trade imbalance is telling—$2.5 billion of that were South African imports, mainly oil.
The two countries established a binational commission in 1999 following periodic tensions that hit a high following tit-for-tat expulsions in 2012.
Nigeria overtook South Africa as the continent’s biggest economy last year, but the latter remains the region’s richest.
South African multinationals are active in Nigeria, including MTN and Multichoice, while Nigerians have also invested in the continent’s southern-most region, but criticise an uneven regulatory playing field.
“We don’t see ourselves as a South African multinational, but as a Nigerian champion,” Chris Maroleng, MTN Group Corporate Affairs executive said, highlighting the telecom significant role in providing jobs and infrastructure.
“In every decision we make Nigeria remains and will remain a key important market,” he said, while noting the growth in new areas such as e-commerce and local film and music content.
The firm derives about a third of revenues from Nigeria, which is its biggest market in Africa with 60 million subscribers.
The role of governance in further pushing Nigeria’s growth was also highlighted.
New president Muhammadu Buhari is expected to crack down on graft and security issues, helping reduce country risk and attract investment, Adedoyin Salami, a member of Nigeria’s Monetary Policy Committee said.
There was widened space for the private sector in Nigeria’s economy, he said, including in finance as oil revenues remained volatile.
Manufacturing was also identified as ripe for South African FDI, while investments in energy and transport infrastructure would reduce the cost of doing business.
The middle class in Nigeria, Africa’s most populous country has also grown significantly, providing a major market for potential investors.