To check South African investors dominating the Nigerian economy in the near future, it is expedient for the government to focus on supporting local businesses to improve their competitiveness, the Nigeria Employers’ Consultative Association (NECA), has said.
Noting that bilateral agreements are commendable and needed for closer cooperation and economic growth, but NECA said of greater importance is the need for local businesses to remain productive and competitive.
The Director-General of NECA, Timothy Olawale, spoke in reaction to the recent bilateral relations between Nigeria and South Africa, in the wake of the diplomatic standoff as a result of the xenophobic attacks. He said as incentives are given to attract investments, efforts must be made to support existing businesses to remain sustainable, expand to create more employment and contribute to national development.
He lauded the two continental leaders in Africa for agreeing to form a more strategic alliance by facilitating further trade between the two countries.
Olawale, however, noted that South Africa has over the years maintained a trade deficit with Nigeria, mainly due to the large import of crude oil that consistently accounted for 99 per cent of South Africa’s imports from Nigeria.
Despite that, Olawale argued that exports are relatively diverse and low, trade between both countries have already exceeded three billion Rand, with Nigeria sending oil and brains to South Africa in exchange for manufactured goods and technology.
He added that the implications of bilateral agreements gave impetus to South African companies’ presence in the Nigerian economy, especially in areas like telecommunication, engineering, banking, retail, and hospitality among others.
He said: “In terms of technology and infrastructure, South Africa has an edge over Nigeria, while Nigeria has an advantage of large market potential for investments over South Africa. This is why there are a lot of South African companies with huge investments in Nigeria.
“The presence of many South African investors in Nigeria has boosted the economies of both counties. This is the result of encouraging bilateral trade relations that existed between the two nations. The South African state has not only opened up Nigeria’s economy to South African investments and exports, but it has also done so through bilateral agreements and a bi-national commission.”
He called on the Federal Government through the Ministry of Foreign Affairs, to always carry the private sector along in some of the agreements, especially at the implementation stage.