Monday, May 25th 2020 5:42 AM

Market Digest Nigeria


President Cyril Ramaphosa Remarks to Nigeria-SA Business Forum

Remarks by President Cyril Ramaphosa during the Nigeria – South Africa Business Forum, Tshwane, South Africa Your Excellency, President Muhammadu Buhari,

Honourable Ministers,


Business Leaders,

Distinguished Guests,

Ladies and Gentlemen,

I warmly welcome all our visitors to South Africa. We meet today to celebrate the promise offered by the relationship between our two great nations. That promise is one of shared prosperity. It is the promise of a united Africa realising its development potential and righting the injustices of our troubled past. It is the promise of an Africa committed to openness and ready to take our place as a key driver of global growth and innovation. As countries of Africa, we must recognise that we will only thrive if the continent thrives. We must recommit to a closer, stronger relationship, grounded in shared prosperity and a shared development destiny. The barriers between us must fall.

We must meet more, trade more, invest more, work together more. To achieve this, Africa must overcome the old patterns of unbalanced and unequal growth, and embrace a model of inclusive, sustainable growth. The African Continental Free Trade Area, and the broader Vision 2063 of the African Union, is a once-in-a-generation opportunity to achieve this vision. The AfCFTA will realise the ambitions of the Abuja Treaty, and create a unified African economy with a combined GDP of more than $2 trillion. The short term value unlocked by the Continental Free Trade Area will be immense, but it is the prospects for future growth that are truly remarkable. By 2050, Africa’s population will grow to 2.5 billion people. The next generation will be more urbanised, better educated and wealthier than any that has come before it. By 2040, the urban population of Africa will be larger than that of China and India, and four times larger than that of the United States.

While the global economy slows, Africa is emerging as the next great growth market. To realise the opportunity of our demographic dividend, we will need to rapidly expand and diversify our industrial capacity. We must become leading producers in the types of consumer products a growing middle class demands, and in the complex industrial products that are needed for core industries like mining, construction and agriculture. The development of regional value chains that allow for specialisation while fairly sharing the benefits of growth will allow our economies to grow as our populations do. Meeting the challenge of a population boom and rapid economic growth will require an infrastructure revolution. The African Development Bank estimates that Africa needs to spend between $130 billion and $170 billion a year to meet our infrastructure needs.

That spending will connect the continent through new road, rail and port infrastructure and, crucially, through broadband. This infrastructure development will strengthen the business environment, but will itself unlock a number of growth opportunities for African manufacturers, construction companies and services firms. Realising these opportunities will require removing blockages to local participation in regional mega-projects. Recent history tells us that if only a few large countries benefit from integration, the long-term prospects for sustainable integration are dim. We must assure that all African states, big and small, benefit from the Continental Free Trade Area. This will be achieved by allowing flexibility in the implementation of the agreement by smaller countries, and by developing a regional industrial vision that recognises each country’s unique capabilities and fairly shares production.

As the two largest economies on the continent, and as the industrial linchpins in our respective regions, Nigeria and South Africa have a unique role to play in driving integration. Our existing regional value chains can be integrated by deepening our bilateral relationships. These efforts build on a strong base. Over 100 South African companies have made investments in Nigeria. Last year, over 1,700 South African firms had active trade relations with Nigeria. South Africa is by far the largest purchaser of Nigerian products in Africa, accounting for nearly half of Nigeria’s exports to the rest of Africa in 2018. The depth of this trade and investment relationship makes Nigeria a key partner for South Africa, and is a sign of our commitment to support President Buhari’s Economic Recovery and Growth Plan.

We need to transform our trade relationship to be one of greater value-addition, with a greater focus on manufactured and agricultural goods. Crude oil still dominates trade between our two counties, despite our sophisticated consumer markets and capable manufacturing sector. As the two Governments, we are committed to create the conditions that will make it easier for South African companies to operate in Nigeria, and for Nigerian companies to operate in South Africa. We are aware of the challenges that sometimes arise in our respective countries, and have agreed to put in the necessary mechanisms to address these. To the South African firms here today, I urge you to reach out to your Nigerian counterparts as you search for suppliers, partners and new markets for your products. South Africa and Nigeria have been working together on the establishment of a Sub-Saharan African Automotive Development Plan.

The plan recognises the important role the automotive sector can play in promoting industrial development, and aims to align our respective initiatives for maximum benefit. The initiative will be important not just to the automotive sector, but as a testing ground for a deeply collaborative approach to industrial development. Both South Africa and Nigeria need to upgrade their electricity generation capacity, by expanding grid capacity and shifting to more sustainable sources of energy. In meeting this challenge, South African and Nigerian firms need to collaborate in the production of key components and work jointly on major development projects. Building this capacity will meet a pressing need for the business community, while also positioning our countries to take advantage of new opportunities in a rapidly evolving energy market. The potential on offer through such partnerships is demonstrated by Transnet’s role in Nigeria’s Narrow Gauge Rail Project. The project aims to improves narrow gauge railway services in Nigeria and provide efficient and reliable transport services.

Transnet has agreed to manufacture, supply and maintain 200 wagons and refurbish and supply 10 locomotives for the first phase of the interim solution. President Buhari, honoured guests, we have a historic mission before us. The vision of African integration is closer than it has ever been. While the African Continental Free Trade Area is a landmark achievement, the promise of the agreement will only truly be realised through engagements like the one we are having today. Engagements where companies come together, find common ground and capitalise on the many shared opportunities that we together can offer.

I wish you all the best for this exciting journey.

I thank you.

Issued by: The Presidency

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