South African businesses are aiming to strengthen trade and investment with Nigeria, a major trading partner in West Africa, where exports to South Africa are predominantly driven by crude oil.
The South Africa-Nigeria Joint Ministerial Advisory Council on Industry, Trade, and Investment (JMACITI)—a public-private partnership formed by the two governments and the private sector at the end of 2021—was established to highlight business opportunities and address market access and operational challenges between the countries.
Under JMACITI, the latest initiative is a video launched by South African businesses that highlights South Africa’s business environment and investment opportunities for Nigerian firms.
In the video, Lungisa Fuzile, regional CEO for South and Central Region, Africa regions of the Standard Bank Group, said, said it becomes easy to pull the different parts of the continent together towards a common agenda when South Africa and Nigeria are aligned.
“The two countries, which are among the biggest economies in sub-Saharan Africa, need to work together for the continent to deliver more effectively on its Agenda 2063 and the African Continental Free Trade Agreement,” Fuzile said.
Lerato Mataboge, deputy director-general of the Department of Trade, Industry and Competition (the dtic), said South Africa offered a predictable environment to investors so the country’s regulations, policies, even legislation, were quite accessible.
“South Africa is very open to investments from the rest of Africa. In fact, intra-African investment is a policy priority of ours,” Mataboge said, adding that the current reform of South Africa’s visa landscape will be an enabler for greater trade and investment.
Sola Adegbesan, President of the South Africa-Nigeria Business Chamber in Johannesburg and head of global markets sales for the Standard Bank Group, said the number of Nigerian companies invested in South Africa was not as much as one would expect, despite the advantages between the two countries in both directions.
“We at the Chamber expect that that number could grow significantly, and we’re more than happy to welcome more Nigerian companies and help to facilitate some of these investment initiatives,” Adegbesan said.
He added that the Chamber was ready to help Nigerian companies navigate and take advantage of South African investment opportunities. Adegbesan also said that South Africa has substantial investment capital available to Nigerian companies.
For Nigerian businesses interested in South Africa, speakers in the video emphasised the importance of understanding South Africa’s investment priorities and trade regulations to ensure a smooth experience.
Bongi Kunene, managing director of the Banking Association South Africa (BASA), said it was critical for the success of trade between the countries to ensure that correct processes are followed throughout the value chain. If there are any issues, the rules must be clear.
Other stakeholders discussed the need for streamlined visa processes to facilitate travel between the countries. They also said that fostering trust between business partners in both countries will be key to increasing trade and benefiting both economies.
The dtic and its Nigerian counterpart coordinate the work of the JMACITI Advisory Councils in their respective countries. JMACITI has prioritised eight sectors for growth: financial services, manufacturing and logistics, digital economy, energy, tourism, agribusiness, and professional services.
According to data gathering firm Statista, South Africa’s gross domestic product (GDP) this year reached more than $373 billion (R6.6 trillion), making it Africa’s largest economy, followed by Egypt at $347.6bn and Algeria at $266.8bn. Nigeria ranks fourth with a GDP of $252bn.
For several African nations, oil is a major revenue source; in Nigeria, it accounted for over 5% of GDP in the second quarter of 2023, with economies like Libya, Algeria, and Angola even more reliant on oil.