Date: 23/08/2006
Source: Department of Trade and Industry
Title: Mpahlwa: Nigeria Investment Forum
Speech by the Minister of Trade and Industry, M Mpahlwa, at the Nigeria Investment Forum, the Hilton Hotel, Sandton
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 “Voice of the People” 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 Africa’s 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)’s 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 “once upon a time” 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 Africa’s development. Let us work hard together to bring to fruition Gabriel Okara’s dream represented in this last stanza, when he says
“So show me, son
How to laugh, show me how
I used to laugh and smile
Once upon a time when I was like you”
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
Source: Department of Trade and Industry
Title: Mpahlwa: Nigeria Investment Forum
Speech by the Minister of Trade and Industry, M Mpahlwa, at the Nigeria Investment Forum, the Hilton Hotel, Sandton
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 “Voice of the People” 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 Africa’s 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)’s 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 “once upon a time” 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 Africa’s development. Let us work hard together to bring to fruition Gabriel Okara’s dream represented in this last stanza, when he says
“So show me, son
How to laugh, show me how
I used to laugh and smile
Once upon a time when I was like you”
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
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