Africa’s two economic giants, Nigeria and South Africa, seem to have buried the hatchet in a relationship that’s historically been marred by economic rivalry, diplomatic tit-for-tats over visa arrangements, and xenophobia. Nigeria is Africa’s largest oil producer and South Africa is the continent’s most industrialised economy.
Nigerian President Bola Tinubu and a high-profile delegation recently met President Cyril Ramaphosa at Tuynhuys for the 11th session of the Nigeria-South Africa binational commission. South African cabinet ministers present included Gwede Mantashe (mineral resources), Leon Schreiber (home affairs) and Parks Tau (trade, industry & competition).
This year marks 30 years of diplomatic relations between the two countries and there are now more than 30 agreements covering economic and scientific co-operation, and tourism. The binational commission was established in 1999 to strengthen ties.
However, South Africa’s high commissioner to Nigeria, Thami Mseleku, tells the FM that “people-to-people” relations remain a thorny issue. “There is an urgent need to address negative perceptions between South Africa and Nigeria to improve overall relations.”
Xenophobia among South Africans has increased in recent years, based on the perception that Africans from other countries are taking jobs from locals. There is also a perception that Nigerians in particular are involved in crime and financial scams.
Ramaphosa says there will be a simplified process for Nigerian businesspeople to travel to South Africa. Those who qualify can get a five-year multiple-entry electronic visa. In addition, tourists from Nigeria are now able to apply for a visa without submitting a passport.
But there is scepticism about the e-visa. Christopher Isike, professor of African politics and international relations at the University of Pretoria, says it seems South African officials simply ignore it. “A lot of people who apply for these e-visas say that they don’t even get a response. They never get the visas. So many think it’s just a ploy to keep South Africa and Nigeria happy at the state-to-state level. Others speculate that the e-visa system may be overwhelmed with applications, causing delays in processing.”
Isike tells the FM that this meeting of the presidents may indicate a reset of the relationship. “The two leaders appear to understand each other, and both have a history of doing business in the private sector before coming into government. At the end of the day, these are the two giants of Sub-Saharan Africa.”
He says Nigerian-South African co-operation could help the entire continent. Apart from setting a good example for others, by leveraging their combined strengths and resources the two giants can boost economies at a time when Africa is threatened by trade wars and rising tariffs.
There is a big trade imbalance in Nigeria’s favour. South Africa’s exports to Nigeria amounted to $355m in 2023, mainly manufactured and agricultural products, while imports from Nigeria stood at $2.3bn, mainly oil and gas. Ramaphosa said the two countries are working towards diversifying their relationship, including closer co-operation in agriculture. “There is much more we need to do. We need to remove the remaining constraints to greater investment, just as we need to address some of the challenges that companies have experienced.”
There is an urgent need to address negative perceptions between South Africa and Nigeria to improve overall relations
— Thami Mseleku
Tinubu said Nigeria and South Africa have a lot to offer each other. “We can identify challenges and deal with them appropriately. Together we can act as engines of economic integration in our regions and in Africa. We have a strong role to play in free trade areas, and Africa looks up to us. We need to leverage our political and economic collaboration.”
The Nigerian economy has battled since Tinubu took office in May 2023. He announced dramatic economic reforms, including the removal of the generous fuel subsidy that cost the government an estimated $10bn in 2022. It had been in place since the 1970s, allowing Nigerians to buy petrol for less than it cost to produce.
It has long been an irony that Nigeria, a major oil producer, did not until recently have significant refining capacity.
An African Development Bank outlook report on Nigeria paints a bleak picture. Growth slowed from 3.3% in 2022 to 2.9% in 2023, due to high inflation and sluggish growth in the global economy. The currency depreciated by 95% in 2023, resulting from the floating of the naira in June 2023. These problems have led to a decrease in consumer purchasing power and more poverty.
A World Bank report on Nigeria notes that since May 2023, the country has implemented “significant reforms to stabilise its economy, resulting in modest growth, improved fiscal health, and rising foreign exchange reserves”. However, while the measures “were necessary to urgently avert a fiscal crisis … they have imposed short-term pressures on households and businesses”.
“They should focus on trade integration. That means they have to expand existing bilateral agreements, such as on tariffs and customs inefficiencies, and just generally promote this trade corridor.
— Janade du Plessis
Isike says a more balanced and mutually beneficial trade relationship will benefit South Africa in the long term. “Some of the mismatches are around misconceptions and misunderstandings about the contributions that Nigerians make in South Africa. Then there’s the value that Nigeria presents for South Africa in terms of what I call its economic sub-imperialism on the continent, which has tended to keep relations between them frosty.”
International relations minister Ronald Lamola, after a meeting with Nigerian foreign minister Bianca Odumegwu-Ojukwu, cited the need for stronger collaboration on bankable projects, especially in infrastructure.
However, big talk is easy. Janade du Plessis of Launch Africa Ventures, which invests in Nigeria, tells the FM some concrete steps are needed urgently.
“They should focus on trade integration. That means they have to expand existing bilateral agreements, such as on tariffs and customs inefficiencies, and just generally promote this trade corridor. What the two of them must definitely do better is champion the African free trade agreement. Up to now both have been very silent on it.”
Du Plessis manages several venture capital funds across the continent, including in Nigeria. “The next thing is obviously energy co-operation,” he says. “We need as a continent to focus on Nigeria’s energy security, and South Africa needs to focus more on renewable energy. And then they must work together on establishing regional energy grids. That will really stabilise the corridor for trade, but also for industrial growth.”
With South Africa assuming the G20 presidency this year and also being part of Brics, Ramaphosa believes Nigeria and South Africa are “important voices” in the international arena and have to be “concerned about the future of our global systems of governance”. Both countries have argued for urgent reform of global financial institutions and the UN Security Council.
Isike says that with the reset of the relationship, Ramaphosa is recognising the importance of Nigerian minerals and of supporting Nigeria’s bid to become part of the G20. “This renewed co-operation between South Africa and Nigeria can strengthen Africa’s position on the global stage.”
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