http://www.finalcall.com/artman/publish/World_News_3/article_10033.shtml

JOHANNESBURG (IPS) - If a Free Trade Area were to be negotiated between Africa's two largest economies, South Africa and Nigeria, it would have a powerful effect on trade across the sub-continent and would challenge other countries to respond.
“In my view it would bring substantial economic benefits to both sides in terms of exports, investment, competition enhancement and, ultimately, productivity,” Peter Draper, a senior research fellow at the South African Institute of International Affairs, told IPS.

The countries have already entered into an informal agreement of cooperation. In May, South African Trade and Industry Minister Rob Davies announced during a visit to this country by Nigerian President Goodluck Jonathan that South Africa pledged to help Africa’s most populous nation make the automotive sector the West African nation’s flagship industrial sector.

However, there are concerns that an FTA would give one-sided benefits to the South Africans, who have a developed manufacturing sector, at the expense of the less-industrialized Nigeria.

“That is not to say South Africa is not favorably disposed, but rather to suggest that to the extent there is political will behind the idea it would be in favor of a limited trade arrangement and not a comprehensive one,” Mr. Draper said.

Johannesburg-based businessman R.J. van Spaandonk has the official license to import Apple computers, phones, tablets and other products into both the South African and Nigerian markets. He told IPS that the proposed FTA would send a very positive signal, as the two governments seem to be getting closer and closer all the time.

“But in practice the benefits may be limited. Many South African companies operate in Nigeria through non-South Africa entities, so it is not clear if they could be considered as beneficiaries of such an FTA.”

However, he did suggest that it would be a welcome move if it were to make it easier to trade between Nigeria and South Africa.

Jabu Mabuza, president of Business Unity South Africa, said that there is big potential for closer relations between the two countries, but said he would need more time to decide whether or not an FTA was the best approach.

“I personally welcome the coming together and reigniting of the relationship between our two nations.

“To the extent we can have mutual socially and politically-rewarding relations, we should do all that it takes.”

However, Dianna Games, the chief executive of Consultancy Africa @ Work, told IPS that she believes there is enough current and future trade between both nations to look at the issue of an FTA. However, she is concerned about the lack of non-oil trade from Nigeria to South Africa.

“The manufacturing sector in that country is still at a fledgling stage, partly because of serious power shortages,” she explained.

“Although Nigeria is one of South Africa’s main suppliers of crude oil, there is almost no non-oil trade taking place.”

The South African Revenue Service reported that in the first three months of 2012 Nigerian exports to South Africa were worth $750 million, with $740 million made up of mineral products, mainly oil. In the same three months, South African exports to Nigeria were worth $150 million.

“The Nigerian market itself is huge and underserved so what capacity exists is easily swallowed up by the local market itself, with some trade into the West African region. There is nothing to suggest that South Africa will be a market of choice for Nigerian goods and services for some time to come,” she said.

This caution was echoed by Foluso Phillips, the chairman of Lagos-based Phillips Consulting, a business consultancy of branding advisors.

“There is much that South Africa can offer Nigeria, but there has been a problem of attitude and lack of trust as well as divergent objectives by both parties,” he said.

“However, there must be a strong spirit of win-win, as the track record and perception makes it all look one-sided in South Africa’s favor.”

He said that any agreement between both countries had to be on real technology transfer and of value to Nigeria. He added that if an FTA were negotiated, “South Africans (could) not come to the table with a ‘smarter by half’ attitude.”

He insisted that there would need to be a focus on bringing value to Nigeria and not on making his country a dumping ground for South African goods if his country’s borders were to be thrown open to South African exports.

Ms. Games said that while there was recognition of the importance of both countries to each other and the continent generally, Nigeria would need to be persuaded of the benefit to its market.

“The discussion about developing linkages between South Africa and Nigeria in the auto industry (which took place when President Jonathan was in South Africa) is an example of something that could be replicated in other sectors,” she said.

She also believes it would be important symbolically to highlight a greater level of cooperation between the two countries, which she sees as the two pivotal states in Africa, both politically and economically.

“The economic success of each is important not just to their respective hinterlands but also to the broader development of the continent, and if an FTA proved to be politically acceptable—not just to politicians but also other stakeholders such as business—it would help to cement ties between the countries,” she concluded.

FTA bt us and South africa? Its a lucrative deal but one small problem.....South africans are xenophobic. Wont this affect the deal?

Nomski0: FTA bt us and South africa? Its a lucrative deal but one small problem.....South africans are xenophobic. Wont this affect the deal?

[img]http://4.bp..com/-iFC5Bdl6WQ8/UA-FFpxvxsI/AAAAAAAABYA/L7nigmK4-vY/s320/raining_money12.jpg[/img]

Any case the xenophobic are the poor people in townships, the business leaders dont see nastionalt, sex, colour, age, only money.

andrewza:

[img]http://4.bp..com/-iFC5Bdl6WQ8/UA-FFpxvxsI/AAAAAAAABYA/L7nigmK4-vY/s320/raining_money12.jpg[/img]

Any case the xenophobic are the poor people in townships, the business leaders dont see nastionalt, sex, colour, age, only money.

Andrew, you now want to dump the navy and chase money

Henry120:

Andrew, you now want to dump the navy and chase money

no i want money for new ships

How exactly does nigeria benefit from this, what are they buying from us. I see just one winner here, if they want our trade let them open their borders.

Obiagelli: How exactly does nigeria benefit from this, what are they buying from us. I see just one winner here, if they want our trade let them open their borders.

what do you have to offer other than oil

.

The automotive industry they are bragging of is just vehicle assembling.
Foreign car manufacturers use southafrica as an assembling unit.
What Nigeria need to do is fix electricity,and those companies will come flooding in.
We don't need southafrica.

Demswear4u?:
Btw,the automotive industry they are bragging of is just vehicle assembling.
Foreign car manufacturers use southafrica as an assembling unit.
What Nigeria need to do is to fix electricity,and those companies will come flooding in.
We don't need southafrica.

Actually we make a number of critical components and even complete engines.
http://www.southafrica.info/business/economy/sectors/automotive-overview.htm#.UdXezPmmjTA
http://www.iol.co.za/motoring/cars/ford/sa-built-ford-engines-for-us-vans-1.1439064#.UdXf7_mmjTA

Fix the electricity, SA production is at 238.3 billion kWh while nigeria is at 20.13 billion kWh. With a population 3 times our size you would need to produce 3 times as much power. instead we produce more than 10 times as much power. We also have the largest power plant construction project in Africa. So to fix it you mean pray for a miracle.

Any case even if god did grant your wish why would they choose nigeria over SA. We already have the facilities and the market. We sell cars all the way up north in algeria who are our largest non SADC african market for cars larger than nigeria. And they closer to europe than SA.

andrewza:

Actually we make a number of critical components and even complete engines.
http://www.southafrica.info/business/economy/sectors/automotive-overview.htm#.UdXezPmmjTA
http://www.iol.co.za/motoring/cars/ford/sa-built-ford-engines-for-us-vans-1.1439064#.UdXf7_mmjTA

Fix the electricity, SA production is at 238.3 billion kWh while nigeria is at 20.13 billion kWh. With a population 3 times our size you would need to produce 3 times as much power. instead we produce more than 10 times as much power. We also have the largest power plant construction project in Africa. So to fix it you mean pray for a miracle.

Any case even if god did grant your wish why would they choose nigeria over SA. We already have the facilities and the market. We sell cars all the way up north in algeria who are our largest non SADC african market for cars larger than nigeria. And they closer to europe than SA.

Are you saying it will take a miracle to fix our electricity sector or what are you saying?
Our electricity is actually undergoing a holistic fix by the world biggest electricity companies ,its only a matter of time before our electricity problem becomes a thing of the past.
10,000MW should be enough to kickstart the economy.
Secondly,those engines and stuff you listed are no big deal.
Nigerians can manufacture those,especially when electricity becomes stable.
Thirdly,Nigeria is a far more attractive investment destination than SA.
Even the FDI inflow into africa is a proof.
Once electricity is fixed,those companies will move into Nigeria and set up plants there, to serve the huge W.africa and central african markets.

Demswear4u?:

Are you saying it will take a miracle to fix our electricity sector or what are you saying?
Our electricity is actually undergoing a holistic fix by the world biggest electricity companies ,its only a matter of time before our electricity problem becomes a thing of the past.
10,000MW should be enough to kickstart the economy.
Secondly,those engines and stuff you listed are no big deal.
Nigerians can manufacture those,especially when electricity becomes stable.
Thirdly,Nigeria is a far more attractive investment destination than SA.
Even the FDI inflow into africa is a proof.
Once electricity is fixed,those companies will move into Nigeria and set up plants there, to serve the huge W.africa and central african markets.

Really you will still be far behind SA then and we have a smaller population.

I don't see nigeria producing anything at that level.

remove all FDI for south africa and SA is the largest contributor to FDI in africa. Basically the investors you speak of south african.

SA already covers the west and central african market and the east not to forget north and south.

zaandrew:

Really you will still be far behind SA then and we have a smaller population.
I don't see nigeria producing anything at that level.

remove all FDI for south africa and SA is the largest contributor to FDI in africa. Basically the investors you speak of south african.

SA already covers the west and central african market and the east not to forget north and south.

10000MW will be enough to kickstart our economy and that is for a start.
It will give us atleast 18 hours of uninterrupted electricity in commercial cities, which are usually where most of these companies are sited.
Secondly,most of the biggest investors in Nigeria are actually from Asia and america.
The southafricans are in the smaller sectors of the economy though in larger numbers.
I don't mind,though.
They see Nigeria as a viable investment destination and they come.
Thirdly,Nigeria is a far more attractive destination for car manufacturers and technological companies due to significantly cheaper labour and less stress from labour Unions.
The only advantage SA has is electricity,and once that is fixed they will naturally enter Nigeria.
They have no business in southafrica,when there's a 170million cheap labour and direct market with decent electricity.
Thirdly,there is nothing special about SAn technology,though decent but it's still in a crude stage.
Nigeria already has the technological manpower both in Nigeria and abroad.
What Nigeria needs now is to solve electricity issues and indigenous technology will expand.

andrewza:

what do you have to offer other than oil

More reason why the deal doesn't make any sense to me, except your borders goes free and Nigerians can do their usual buying n selling.

solomon111: 10000MW will be enough to kickstart our economy and that is for a start.
It will give us atleast 18 hours of uninterrupted electricity in commercial cities, which are usually where most of these companies are sited.
Secondly,most of the biggest investors in Nigeria are actually from Asia and america.
The southafricans are in the smaller sectors of the economy though in larger numbers.
I don't mind,though.
They see Nigeria as a viable investment destination and they come.
Thirdly,Nigeria is a far more attractive destination for car manufacturers and technological companies due to significantly cheaper labour and less stress from labour Unions.
The only advantage SA has is electricity,and once that is fixed they will naturally enter Nigeria.
They have no business in southafrica,when there's a 170million cheap labour and direct market with decent electricity.
Thirdly,there is nothing special about SAn technology,though decent but it's still in a crude stage.
Nigeria already has the technological manpower both in Nigeria and abroad.
What Nigeria needs now is to solve electricity issues and indigenous technology will expand.

Is that with the wish of new factoris included. 18hours, so rolling black outs. Why would any one build a factory where it will be effected by rolling black outs.

Check the nastion coutbiting to FDI. All those small scall investements add up.

Only resone nigeria has not had strikes is because most are self employed.

170million but how many of them are completing school.

What about export is nigeria set up for this added export. Is expanding durban and build a new port due to demand.

It not just electrcal power that brings these people here.

SA is far more stabel, doing bussness is easyer, a large educted work force, all the infustrucer is all read in place. We control 80% of the african automotive industry. You really think that small increase in power will allow you to compet with us.

Obiagelli:
More reason why the deal doesn't make any sense to me, except your borders goes free and Nigerians can do their usual buying n selling.

Qustion still stands. What doees nigeria have to offer?

zaandrew:

Qustion still stands. What doees nigeria have to offer?

Nigeria offers what the likes of mtn, dstv, shoprite and co are enjoying, so what is SA offering?

Obiagelli:
Nigeria offers what the likes of mtn, dstv, shoprite and co are enjoying, so what is SA offering?

We providing MTN,DSTV,shopright,cars,machinary,extra. What would nigeria sell to SA.

zaandrew:

We providing MTN,DSTV,shopright,cars,machinary,extra. What would nigeria sell to SA.

You ain't offering us dstv n Co, we are allowing you operate here, we would like access to open shops and trade in your country like we do in Ghana and other parts of africa.

zaandrew:

Is that with the wish of new factoris included. 18hours, so rolling black outs. Why would any one build a factory where it will be effected by rolling black outs.

Check the nastion coutbiting to FDI. All those small scall investements add up.

Only resone nigeria has not had strikes is because most are self employed.

170million but how many of them are completing school.

What about export is nigeria set up for this added export. Is expanding durban and build a new port due to demand.

It not just electrcal power that brings these people here.

SA is far more stabel, doing bussness is easyer, a large educted work force, all the infustrucer is all read in place. We control 80% of the african automotive industry. You really think that small increase in power will allow you to compet with us.

The automobile companies will not work for 24 hours so yes,18 hrs of uninterrupted electricity in the daytime will be enough atleast for a start.
The target is still 24 hrs electricity.
Secondly,as i said before,Nigeria is a far more attractive investment destination than SA.
The Stats are there to prove it.
Thirdly Southafrica is not that developed,whatever infrastructure you think you have can be replicated in Nigeria in the shortest possible time.
The only real constraint is electricity,which will be taken care of.

solomon111: The automobile companies will not work for 24 hours so yes,18 hrs of uninterrupted electricity in the daytime will be enough atleast for a start.
The target is still 24 hrs electricity.
Secondly,as i said before,Nigeria is a far more attractive investment destination than SA.
The Stats are there to prove it.
Thirdly Southafrica is not that developed,whatever infrastructure you think you have can be replicated in Nigeria in the shortest possible time.
The only real constraint is electricity,which will be taken care of.

Night time power use is when it is at it lowest, and 18 hours means there will always be somewhere without power due to rolling blackouts. it will not be enough because as soon has people build factories the problem will return.

Yes and the biggest investors by numbers are from south africa.

So you going to build 3 of the biggest docks in subshara africa in how long, what about banking system, stability, extra.Electricity is only one of a host of problems you face, and you little power project will not fix it

Obiagelli:
You ain't offering us dstv n Co, we are allowing you operate here, we would like access to open shops and trade in your country like we do in Ghana and other parts of africa.

Nigerians already open shops in SA, i mean what products does nigeria have to offer.

zaandrew:

Nigerians already open shops in SA, i mean what products does nigeria have to offer.

ask other African countries and some European countries, they'd tell you... You have stringent business policies which deters potential investors.. All these were highlighted during Jonathan's recent visit, I do hope both sides would come to terms

scipher: ask other African countries and some European countries, they'd tell you... You have stringent business policies which deters potential investors.. All these were highlighted during Jonathan's recent visit, I do hope both sides would come to terms

really
http://www.doingbusiness.org/rankings

SA is ranked 39 while nigeria is at 131

you mostly sell crude oil i want to know what else

It's trade people - you give me something, and I give you something. At the moment Nigeria only gives oil while SA gives a long list of things.

zaandrew:

Night time power use is when it is at it lowest, and 18 hours means there will always be somewhere without power due to rolling blackouts. it will not be enough because as soon has people build factories the problem will return.

Yes and the biggest investors by numbers are from south africa.

So you going to build 3 of the biggest docks in subshara africa in how long, what about banking system, stability, extra.Electricity is only one of a host of problems you face, and you little power project will not fix it

Everything you wrote is balderdash.
1)18 hrs of uninterrupted electricity in the commercial cities will be enough to serve the energy needs of car companies.
And you have no reason beside bitterness to say otherwise.
2)southafrican investments are many but negligible.
The biggest investors in the most critical sectors comes from asia and america.
The biggest SAn investment in Nigeria is MTN and it has a Nigerian competitor GLO.
3)our banks are relatively stable and hugely capitalized and they are spread all across Africa.
Infact the best African bank 2012 was won by GTB a Nigerian bank.
Our banks ranks among the best in Africa.

zaandrew:

really
http://www.doingbusiness.org/rankings

SA is ranked 39 while nigeria is at 131

you mostly sell crude oil i want to know what else

The ease of doing business in Nigeria has been hampered majorly by electricity issues though it has improved in recent times.
And last time i checked, Nigeria still attracts more investments than SA,so once electricity in Nigeria is stabilized SA is a goner.
Btw,if you think the only thing Nigeria has to trade is crude oil,then you must be more dumb than i thought.

paniki: It's trade people - you give me something, and I give you something. At the moment Nigeria only gives oil while SA gives a long list of things.

Sorry,we don't need your 'long' list.
Many of those things you think you can offer can be made in Nigeria by Nigerians.

I think it would be best if we just wait and see, because i am tired of arguing.
This would be my last reply on this thread.

solomon111: The ease of doing business in Nigeria has been hampered majorly by electricity issues though it has improved in recent times.
And last time i checked, Nigeria still attracts more investments than SA,so once electricity in Nigeria is stabilized SA is a goner.
Btw,if you think the only thing Nigeria has to trade is crude oil,then you must be more dumb than i thought.

the index includes electricity, nigeria is high in everything else to

solomon111: Everything you wrote is balderdash.
1)18 hrs of uninterrupted electricity in the commercial cities will be enough to serve the energy needs of car companies.
And you have no reason beside bitterness to say otherwise.
2)southafrican investments are many but negligible.
The biggest investors in the most critical sectors comes from asia and america.
The biggest SAn investment in Nigeria is MTN and it has a Nigerian competitor GLO.
3)our banks are relatively stable and hugely capitalized and they are spread all across Africa.
Infact the best African bank 2012 was won by GTB a Nigerian bank.
Our banks ranks among the best in Africa.

that 18 hours before new factories open
MTN is just one investor, a lot of the others use nigerian subsidiaries, we invest in all sectors including oil.

i was talking about the country being stable, i suggest you go look at 300 top companies in Africa and see all the SA banks ahead of GTB

solomon111: I think it would be best if we just wait and see, because i am tired of arguing.
This would be my last reply on this thread.

wait for what, car companies that already have all their infrastructure in SA, power level that will not change, or somthing else