Industrialization, development occupy central stage at Cape Town World Economic Forum

Published May 12th, 2013 - 10:48 GMT
President Jacob Zuma addresseS the World Economic Forum plenary session on BRICS. (Photo: GCIS)
President Jacob Zuma addresseS the World Economic Forum plenary session on BRICS. (Photo: GCIS)

Last week, President Goodluck Jonathan led a delegation to the World Economic Forum (WEF) on Africa, which opened in Cape Town, South Africa on Wednesday. What has the delegation returned with?

Jonathan left Abuja on Monday for a two-day state visit ahead of the economic forum meeting. Jonathan and his South African counterpart Jacob Zuma discussed ways to boost trade between the Africa's two biggest economies and signed a couple of Memoranda of Understanding (MoU).

Discussions centered on industrialisation, infrastructure development and the enormous opportunity for businesses in both countries. Specifically, the forum focused on mines, power, banking, finance, oil and gas.

The two countries already have a bilateral relations, structured through the Bi-National Commission which was inaugurated in 1999. As result, over 100 companies in South Africa are doing business in Nigeria. MTN and Multichoice, all telecommunication companies are the biggest investments so far. MTN is Nigeria's largest mobile operator, with more than 47million subscribers. Nigerian delegation held separate meetings with MTN and representatives of car manufacturers Toyota and Nissan.

The thrust of this summit includes accelerating economic diversification, boosting strategic infrastructure and unlocking Africa's talent.

Jonathan who on Tuesday, at the start of the Nigeria/South Africa Business Forum in Cape Town noted that Nigeria and South Africa must give priority to intra-regional trade and play leading roles in boosting inter-regional trade on the continent said the forum is expected to bring significant improvement to trade and investment between Nigeria and South Africa.

He said the success story of the forum will not only bring about stronger bilateral and economic relation between the two countries but will strengthen bonds of business and friendship among Nigerians and South Africans.

"The forum is also expected to improve on other socio-economic activities, as well as increase the volume and value of trade between the two countries," Jonathan said.

Jonathan commended South Africa for the high standard of infrastructure development that made it to host major international events.

In his remarks, President Zuma said, "We have today witnessed the signing of new agreements and Memorandum of Understanding between our countries. Our ministers will ensure the effective implementation of these instruments and the conclusion of outstanding ones. We'll welcome the participation of South Africa business in other sectors of the Nigerian economy such as engineering, construction, media, banking, retail, hospitality, oil and gas exploration and services. We've also seen kin interest from Nigeria business concerns to invest and do business in South Africa across a number of sectors."

The Nigeria Minister of Trade and Investment, Dr Olusegun Aganga said, "The signing of the MoU between the two countries is a pointer to the resolve by the two countries to drive and expand the economy of Africa and create more jobs for its teeming population" adding that the business communities in the two countries have decided to take economic relationship between the two countries to the next level.

Alhaji Aliko Dangote, who le the Nigerian business group for the meeting lamented that businessmen in Nigeria suffer hurdles securing visa. He advised authorities to tackle the issue for business dealings between the two countries to thrive. "No serious businessman will go and wait for 10 days for issuance of visa," he noted.

He talked about the need for partnership in areas the two countries have comparative advantages especially in mining and automobile industry. He said South Africa and Nigeria should create tax holiday for investment on bilateral bases in addition to promoting government policies.

Dangote stressed the need for mutual trust and respect to engender confidence between the parties so that businesses can grow in the two countries. "There is need to set up a Nigeria-South Africa trade and investment commission to be made up of 10 businessmen each from the two countries. This will foster better relations as we explore business opportunities in both countries with attendant benefits to our citizens as we strive to eliminate abject poverty from Africa," he said.

President of South Africa Black Business Council, Xoleni Qhubeke said the two business delegations had robust business discussions on ways of growing business on the continent.

"There is a common purpose around industrialisation, infrastructure development, and there is enormous opportunity for businesses in both countries," Qhubeke said.

Diversification of economy

Mr Emeka Unachukwu, President of the Port Harcourt Chamber said the economic summit can help Nigeria diversify its economic base.

He was optimistic that the country's potential will be unlocked through the bilateral partnerships saying, "It's predicted that Africa's growth will be about five percent within the next four to five years continually; that's on the average, which ranks about the best in the world. Economic diversification is what we need locally in our country. It's the gospel of this administration; they have been pushing that we should look at other ways of growing our economy outside oil. And I think if our policy holders and leaders... will listen attentively, and come back with very good suggestions on how to add to the existing good policies that we have here for us to be able to diversify our economy."

Unachukwu said Africans are a talented people and called on the continent's leaders to harness the abundant talents available to grow the economy. He expressed optimism that the summit would offer Nigerians, the opportunity to revive its moribund rail transport system.

Nigeria's delegation included ministers of finance, foreign affairs, trade and investment, petroleum, agriculture, mines and steel, as well as Dangote, Africa's richest man, according to Forbes.

Issue of concern

Last Thursday, reactions trailed the new economic rating of Nigeria by the World Bank, which moved the country from a low income nation to a medium income one. The bank had hinged Nigeria's new rating on the reduction of poverty rate per capita in the country from 64.2 percent to 62.6 percent, as well as improvement in revenue accretion.

According to the World Bank Country Director for Nigeria, Ms. Marie Francoise Marie-Nelly, the decision on Nigeria's rating was taken at last month's Spring meeting of the World Bank/International Monetary Fund (IMF) in Washington.

The improvement in rating gives the country the privilege of borrowing from the International Bank for Reconstruction and Development.

Prof. Ndubuisi Nwokoma, Head, Department of Economics, University of Lagos, told the News Agency of Nigeria (NAN), in an interview in Lagos that the economic rating was more of a perception.

According to him, the World Bank might have hinged their rating on a few economic developments in the country which were not enough to show a true reflection of the current status of the country.

"They should have looked at a lot of factors before passing such judgment because such ranking does not represent the interest of the common man in the street. The issue about this whole rating is based on our growth rate and I feel it is a paradox because we are yet to see the impact on the average Nigerian," he said.

Dr Adebayo Adedokun, a Senior Lecturer in the Department, also agreed that the new rating was a good omen but argued that there was need for an inclusive growth.

He described the rating as an additional challenge for the managers of the country's economy to be more proactive.

According to him, the managers should ensure that the improvement has a trickling effect on the masses.

He said that the country had a growing economy and a growing rate of poverty which makes the entire development a paradox.

"In most medium-rating countries, the quality of life of the people is usually enhanced but that seems not to be the case with us here in this part of the divide.

"We are happy with this rating though, because it simply shows that managers of the economy's fundamentals are really doing a good job.

"But I still feel it is not inclusive because there is no employment and infrastructure upon which we can sustain this rating," he added.

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