As President Jacob Zuma visited Nigeria to settle the long rift between South Africa and Nigeria, people expect that the economic relationship between the two countries who are seen as the continent’s powerhouse will improve for the better.
Prior to the arrival of President Mohammadu Buhari as Nigeria’s new president, the Nigerian economy like that of South Africa has been faced with huge hi-cups.
While Nigerian economy has been undermined by the huge drop in the price of crude oil, South Africa’s growth faces its own by the slowdown in China and falling commodity prices.
The two countries could be said to be faced with a similar problem – corruption – which could be linked to the ailing economic condition of the two countries. For Nigeria, it has lingered long before the arrival of President Mohammadu Buhari as its new president in 2015.
2014 saw the rise of Nigeria above South Africa by becoming Africa’s largest economy achieved following the country’s re-position of its gross domestic product figures in April 2014.
However, while 120 South African companies operate in Nigeria, the west African nation has far less opportunity for its citizens to invest in the South African nation. Nigeria only stands as Pretoria’s seventh-biggest trading partner on the continent.
When Zuma visited Abuja last week, Buhari set aside diplomacy and accused one of South Africa’s largest companies of failing the country in its fight against the Boko Haram insurgency.
MTN, with was Nigeria’s largest telecommunication, has been battling with the Nigerian government over the $ 3.9 billion levied on them for missing a deadline to disconnect 5.1 million unregistered SIM cards, a legal requirement aimed at hampering the militant Islamists.
Buhari said the Nigerian government’s concern was to ensure large security measures of its people and not to the fine imposed on the faulted company. MTN was “very slow” in cutting off the lines and that the unregistered lines were used by “terrorists” and “contributed to the casualties”. he added.
This huge fine has generated lots of issues between the two countries. To South Africans, the fine was set out of envy.
According to an analyst with the Institute of Security Studies in Pretoria Peter Fabricius, some South African business people and officials suspect that South African companies are being targeted because of envy from local competitors.
But to Nigerians, by not meeting up with the deadline for registering its users, MTN showed a “gross negligence of the rules and arrogant,”
The director general of Lagos Chamber of Commerce and Industry, Muda Yussuf said that it “does not mean these companies are being targeted”.
“It is just that companies operating anywhere have to comply with the laws governing business behaviours in their host countries. It does not matter if the companies are from South Africa or somewhere else. Laws are made to be obeyed. What happened to MTN can happen to any Nigerian company.” Yussuf added.
Report also has it that some other South African companies on Nigeria has been facing similar queries by the government with some of the companies like Truworths clothing retailer opting out already.
According to a report, Hotel and resort chain group Sun International is also a target of investigation by the country’s economic financial crimes commission.
“We have an exemplary track record of operating in many countries over the past 30 years, but the difficulties we have experienced in Nigeria are unprecedented,” Michael Farr, Sun International group’s general manager for communications, told AFP. “We’ll continue to evaluate the situation and therefore our options,” he added.
Zuma’s successful visit to Nigeria were popularly seen by both countries as a huge step towards ending the cold war that has ensued between the two.
“Nigeria is such a strategic country that cannot be easily ignored by any country globally,” an investment analyst and former senior manager with the Nigeria Stock Exchange, Sola Oni added.