The governments of South Africa and Nigeria have committed to creating a conducive business environment that will make it easier for business to operate.
“We are aware of the challenges that sometimes arise in our respective countries, and have agreed to put in the necessary mechanisms to address these,” President Cyril Ramaphosa said on Thursday.
Addressing the South Africa-Nigeria Business Forum in Midrand, South Africa’s President Cyril Ramaphosa said there’s a significant number of local companies conducting business in Nigeria.
Currently South African companies are operating in Nigeria’s telecommunications, banking, retail, hospitality, mining, tourism, agriculture and construction and tourism sectors.
To further strengthen their ties, South Africa and Nigeria have been working together on the establishment of a Sub-Saharan African Automotive Development Plan.
The plan recognises the important role the automotive sector can play in promoting industrial development, and aims to align both countries’ respective initiatives for maximum benefit.
“The initiative will be important not just to the automotive sector, but as a testing ground for a deeply collaborative approach to industrial development,” he said.
The President also spoke to the need for both countries’ to upgrade their electricity generation capacity, by expanding grid capacity and shifting to more sustainable sources of energy.
Collaborating on industry
On rail infrastructure, President Rampahosa urged South African and Nigerian firms to collaborate in the production of key components and work jointly on major development projects.
“The potential on offer through such partnerships is demonstrated by Transnet’s role in Nigeria’s Narrow Gauge Rail Project,” said the President of the project that is aimed at improving narrow gauge railway services in Nigeria.
It also aims to provide an efficient and reliable transport services.
South Africa’s state-owned freight and Rail Company, Transnet, has agreed to manufacture, supply and maintain 200 wagons while it will also refurbish and supply 10 locomotives for the first phase of the interim solution.
President Ramaphosa emphasised the importance of countries on the continent working together.
“As countries of Africa, we must recognise that we will only thrive if the continent thrives. We must recommit to a closer, stronger relationship, grounded in shared prosperity and a shared development destiny,” he said.
He said while the global economy slows, Africa is emerging as the next great growth market.
“To realise the opportunity of our demographic dividend, we will need to rapidly expand and diversify our industrial capacity.”
He urged countries on the continent to become leading producers of products demanded by the growing middle class as well as complex industrial products that are needed in core industries like mining.
The President said the development of regional value chains that allow for specialisation while fairly sharing the benefits of growth will allow the continent’s economies to grow.
South Africa’s Minister of Trade and Industry, Ebrahim Patel, said South Africa and Nigeria need to work together to achieve the goals in the National Development Plan (NDP) as well as the African Economic Development and Integration Agenda, encapsulated in the Abuja Treaty.
Joint Ministerial Advisory Council
This as South Africa and Nigeria have agreed to the establishment of forums, the development of policy initiatives, the promotions of deeper cooperation and the establishment of a joint ministerial advisory council on industry trade and investment.
The council will include representatives of the private sector of both countries as well as government officials. The council is expected to meet twice a year, once it is inaugurated next year.
“We now need the business community to build on the foundations laid by the Heads of State,” Patel said.
The total value of trade between South Africa and Nigeria amounted to R50.8 billion in 2018.
President Ramaphosa is hosting the President of Nigeria, Muhammadu Buhari, who is on a two-day State Visit to South Africa.
This was the first incoming State Visit to be hosted by South Africa under the sixth administration.
South Africa and Nigeria share sound political, economic and social relations that were formally established in 1994, immediately after South Africa’s first democratic elections.