We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
close notification
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
Map
