Nigeria Investment Forum, the Hilton Hotel, Sandton
23 August 2006
Honourable Ministers
Your Excellency, Ambassador Ashiru
Representatives of Industry
Distinguished guests
Ladies and gentleman
I am delighted to be here and to participate in this important event and
wish to extend a warm welcome to all dignitaries and delegates from both South
Africa (SA) and Nigeria. Allow me firstly to also use this opportunity to
congratulate the Ambassador, His Excellency, Otumba Ashiru, his staff and the
SA Nigerian Chamber of Commerce for their foresight and perseverance in making
this event a reality. His appointment could not have come at a better time as
our economic relations are now ready for a step change and I trust that his
passion for growing our economic relations will continue from strength to
strength. This passion for strengthening and deepening our relationship is
based on our long and historically significant past with Nigeria. We have not
forgotten and will continue to remember the role played by the Nigerian
Government and people in supporting the liberation struggle in South
Africa.
This event today signifies a critical step we need to take to ensure the
entrenchment of trade and investment relations between our countries. In
providing a platform for discussion on challenges facing business in our
countries, opportunities and potential threats for transacting business, this
event can act as a catalyst for greater economic cooperation between South
Africa and Nigeria. My understanding is that in this regard, this event will
seek to foster, and highlight, the importance of creating effective linkages
between our governments and business communities.
The climate for firming up these linkages is very ripe and we must act
decisively to derive optimal benefits for African development. For instance,
the most recent economic data shows that growth in sub-Saharan African reached
an eight-year high of 5% in 2005. This impressive growth was underpinned by the
lowest rate of average inflation in 25 years. It is no wonder that a recent
âVoice of the Peopleâ survey showed that a majority of Africans are optimistic
about the future, in fact, no other people in the world showed the same or
higher level of optimism. To fulfil this optimism I believe strongly that we
must create a sustainable path for continued growth and we must increase the
levels of intra-Africa trade. The importance of this event today is underscored
precisely by the fact that that it will provide us with the opportunity to give
concrete expression to our efforts to jointly develop a strong and competitive
Africa.
Ladies and gentlemen, SA and Nigeria are regarded as the economic
powerhouses for their respective Regional Economic Communities. The economy of
Nigeria alone contributes 57% to the overall Gross Domestic Product (GDP) of
West Africa. Currently, economic growth in West Africa is spearheaded by the
performance of the oil industry in Nigeria and agriculture in the region as a
whole. It is therefore important that Nigeria, as the economic powerhouse in
the region, spearheads regional integration initiative in West Africa. The
Joint Development Zone, an initiative between Nigeria, Equatorial Guinea and
Soa Tome and Principe is one of the developmental projects that will positively
contribute to the overall capacity building in the oil sector in the zone.
Together with these developments, the region, with a total population of 235
million people, which is estimated to almost double in the next two decades,
therefore represents a significant market and undoubtedly presents exciting
opportunities for investment and exports.
Programme Director, South Africa and Nigeria have steadily built a sound
economic and trade relationship over the past 12 years. Concrete evidence of
this positive development is the South Africa/ Nigeria Bilateral Trade
Agreement and Reciprocal Promotion and Protection of Investment agreements
signed in 1999. Since then we can now celebrate the fact that Nigeria is
currently South Africaâs top import partner in Africa, and number 3 partners in
Africa, after Zimbabwe and Angola in terms of exports. It is also true that
imports from Nigeria are currently skewed, consisting mainly of oil (95%), and
small quantities of rubber and palm oil. We must work on ensuring greater
diversification in this import pattern. In contrast, the major exports from SA
into Nigeria show greater diversification. Packaging material, plastics, and
other consumer goods have showed a relative decline in the last three years in
favour of exports that are aligned with our various new South African
investment in Nigeria, for example telecommunication towers and masts,
aluminium structures and petroleum, products etc.
Our analysis suggests that largely responsible for the decrease in certain
exports from South Africa is the National Economic Empowerment and Development
Strategy (NEEDS), the Nigerian macro economic framework, which encourages the
development of local industries and consequential limiting of various products
from Nigerian markets. Further declines in exports to Nigeria are expected
because of the change in customs administration introduced in January 2006. Mr
Ambassador, in this regard I must state clearly that we support the initiatives
to develop indigenous industrial capacity and understand the need to nurture
fledgling industries. The South African experience of industrialisation has
much to offer in this regard, both positive and negative, but any initiative to
fully exploit comparative and competitive advantages can, I believe, only be
beneficial to both our economies in the future.
Ladies and gentlemen, South Africa is a major source of investment for
Nigeria, with significant investment in the oil and gas industry, information
and communication technologies, retail, banking, entertainment and tourism
industries. Investment is an essential aspect of our strategy for Africa, and
we are strongly encouraging a responsible approach to trade and investment
promotion strategies that ensures the facilitation of transfer of production
technologies, technical know how and skills development. Through this
developmental approach we endeavour to participate meaningfully in the overall
development of a country and its people.
We will also intensify our efforts to attract Nigerian investment into South
Africa particularly in light of the attractive investment possibilities
presented by the hosting of the Federation Internationale de Football
Association (FIFA) Soccer World Cup in 2010, which by the way Nigeria and South
Africa must be co-favourites to win!
Ladies and gentlemen, to provide substance to our intentions of deepening
our economic ties, the South African department of trade and industry has
developed a seven-point programme to facilitate our commitment to grow
bi-lateral initiatives.
The first of these is the development of a coordinated comprehensive
strategy for economic cooperation with Nigeria. In this regard we are currently
researching various existing Memorandum of Understanding (MoU)s that Nigeria
signed with developing and developed partners in order for us to determine the
parameters and modalities for future mutually beneficial arrangements.
Secondly, we have succeeded in enhancing the South African diplomatic
profile in Nigeria by appointing a dedicated Foreign Economic Representative
for trade and investment related issues. To support this development, the
process of establishing a working group on Nigeria consisting of government,
private sector and civil society is well underway.
Thirdly, in close collaboration with our Nigerian friends, we seek to
encourage the implementation of an African agenda that could enhance the
development of trade, cultural and civil society association between
stakeholders in South Africa and Nigeria.
Fourthly, given that seventy six percent of the trade between South Africa
and the West African region, is accounted for by trade between SA, Nigeria,
Ghana and Senegal, huge opportunities exist to enhance trade relations between
SA and other countries in the region. South Africa presents a potentially very
important market for imports from West Africa, and conversely, West African
countries provide a huge market for SA trade, e.g. manufactured goods, capital
goods, etc and investment in sectors such as oil and gas, mineral, agriculture
and infrastructure development. Joint venture partnerships with Nigerian
business will, we believe, greatly facilitate our collective ability to trade
in the various markets.
Fifthly South Africa could through the engagement and involvement in
peacekeeping initiatives in the continent, collaborate with Nigeria and use
this platform to encourage enhanced relationships between various civil society
organisations in the region, for example in the areas of brokering peace, as
well as the establishment of non-governmental organisation (NGO)âs that could
assist with issues pertaining to rural development, humans rights, youth and
women development.
The sixth point of our strategy is based on the belief that South African
and Nigerian skills and knowledge should be preferred technical partners for
implementations of various projects in the region. In most areas South African
skills and knowledge is sub contracted, by developed nations, to implement
skills in the region. Joint venture partnership with various development
agencies and multilateral institutions amongst others is vital for the
implementation of projects in the region. But we must collectively address the
issue of ensuring that these partnerships also develop the skills of our
people.
Finally, Africa is an increasingly important oil supplier for both developed
and developing nations of the world, with 25% of oil export destined for China
and 15% destined for United States. Oil export to these countries is estimated
to rise even more with estimates that China will be demanding 60% of oil
resources by 2020. Energy resources in South Africa, is also become a challenge
and alternative sources of energy are needed to meet the rising demand in our
country. Of course West African resources present an ideal opportunity to meet
such demand. A challenge however remains, with the huge interest and resources
available from other countries. However, with SASOL and PETROSA being the world
leaders in gas to liquid technology, enormous opportunities exist for joint
venture partnerships and capacity building in this area. South Africa is also a
major player in both the exploration and development of technologies and
equipment for extraction of minerals and clearly, joint venture partnerships
with Nigerian companies should be encouraged to develop these industries and
technologies within Africa.
In conclusion, I am indeed confident that the various presentations and
deliberations on opportunities in Nigeria will yield tangible results in terms
of trade and investment between the two countries. It is my sincere wish that
mutually beneficial business linkages, partnerships and joint venture
partnerships will emerge from our discussions today. I wish you success in all
your endeavours. I cannot over emphasise the importance of enhanced trade
relations between our countries. SA might not possess the financial resources
that some of our competitors for investment in Nigeria possess, but we are
confident that we can provide you with African solutions to African economic
problems and that by the Special Grace of God; we trust that we will become
your African partner of Choice. I wish to leave you by quoting from the last
stanza of that famous poem âonce upon a timeâ by the Nigerian Poet, Gabriel
Okara. The poem speaks of an Africa of a time before outsiders had imposed
their own ideas of development for Africa. As Africans we are now beginning to
develop our own ideas for Africaâs development. Let us work hard together to
bring to fruition Gabriel Okaraâs dream represented in this last stanza, when
he says
âSo show me, son
How to laugh, show me how
I used to laugh and smile
Once upon a time when I was like youâ
Distinguished audience, with those wonderfully profound authentic African
thoughts, I thank you.
Enquires:
Henriette van der Merwe
Tel: (012) 394 1640
Cell: 082 572 8184
Bongani Lukhele
Tel: (012) 394 1643
Cell: 083 291 8689
Bethuel Mnguni
Tel: (012) 394 1647
Cell: 083 624 8888
Donavan Jacobs
Tel: (012) 394 1641
Cell: 082 751 1078
Please address all your media enquiries to:
E-mail: mediarelations@thedti.gov.za
Issued by: Department of Trade and Industry
23 August 2006
