As Africa’s two largest economies, Nigeria and SA could substantially enhance the continent’s development prospects — particularly if they work together more closely. SA, with a gross domestic product (GDP) last year of about $368bn, is Africa’s biggest economy, despite growth that is forecast to slow to less than 3 percent this year.
Meanwhile, the continent’s most populous nation, oil-rich Nigeria, overtook Egypt last year to become Africa’s second-biggest economy by GDP, recording $232bn. It has been envisaged that, with a growth rate of 7 percent, Nigeria could overtake SA by 2015.
Clearly, mutual benefits could accrue from a relationship that combines South African capital and know-how in creating business models for African marketplaces and within African institutional contexts, with access to Nigeria’s burgeoning economy of 140-million consumers — the single largest market in Africa and three times the size of SA’s. A recent policy seminar organised in Lagos by the Centre for Conflict Resolution, and involving key diplomats and business people from SA and Nigeria, sought to explore these benefits and to strengthen ties between both countries.
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South African and Nigerian business people have recognised the synergies. Trade between the two countries has grown 10-fold since 1999 and they are each other’s largest trading partners in Africa. The value of bilateral trade, which totalled only $16.5m in 1999, increased to more than $3.6bn by last year. Nigeria now represents a long-term destination for South African investments and is home to many of its recent business ventures. MTN led the way, posting greater profits from its West African operation than it did in SA within only four years of entering the Nigerian market in 1999.
Other notable South African businesses in Nigeria include Standard Bank; Rand Merchant Bank; Chicken Licken and Debonairs Pizza; SABMiller; and retailer Shoprite Checkers. Media house Avusa has opened Nu Metro cinemas and multimedia stores, and DVD and CD manufacturing plants. Multichoice has 700,000 Nigerian customers and has spent $100m developing local content.
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