Nigeria and Africa

Do you really want South African businesses out of Nigeria?

Do you really want South African businesses to leave Nigeria?


In the wake of numerous xenophobic attacks, targeted on Nigerians living in South Africa, most commenters have opined, that it is high time the South African investors and entrepreneurs living in Nigeria, were kicked out.
If that is not the most irrational thing I’ve heard, then I don’t know what else could be. We have the penchant for making irrational decisions, a special way of thinking that the cure for conflict is “counter-attack”. It’s a kind of reprisal, but this time, not pervading the lives and properties of people. These armchair critics feel that we can sanction RSA by charging high taxes on its businesses, having stricter policies guiding its multinational companies here, while some want them be totally obliterated from the surface of our “independent and stable economy”. There are so many ways in which we serve as an important market for South Africa’s different sectors namely:

1. Media
2. Retailing
3. Telecommunications

Notable companies that fall into these categories are Multichoice, with its DSTV and GoTV pay-TV subscription services. Multichoice has established itself as a market leader for more than thirteen years, shrugging off competition from indigenous media companies during that time. Shoprite and Game, which are similar in what they offer-retailing services, have brought a world-standard shopping experience to Nigerians in different regions. Their constant expansion into under-served markets, is a testimony to its business success in Nigeria. MTN came to Nigeria, when the GSM telecoms technology was adopted in Nigeria. They were one of the first movers, when our dear old NITEL had nothing to offer anymore. Sixteen years later- they are the market leader in the telecoms sector, and offer one of the best levels of service in the industry.

The question is: if you kick these companies out of Nigeria, do you have alternatives to replace them and provide the same quality of service? Making this move will not only create a rough international relations with RSA, but will unavoidably set-back our economy, in various ways:

1. Massive retrenchment which will lead to massive unemployment.
2. Massive reduction in revenue generated in the services sector.
3. Lack of alternatives, as per services rendered by some of these companies.
4. Those malls, where the retail outlets are situated, are at risk of running losses, because most of the customer traffic goes there.
5. These companies have created numerous SMEs businesses, ranging from recharge card agents, dish installers, technicians and so on. If they pack their bags and call it a day, invariably, other hands in the value chain will be affected.
6. Local suppliers who deal with the big shops will have to turn to other buyers(even though, most of the shop’s items are imported. Their sales will dwindle anyway.)
7. Nigerian service providers, who support these companies, will be left with lesser revenues, as their major accounts would have closed shop!

The list of negatives, pertaining to sacking South African companies, are as long as the road from Calabar to Sokoto. Despite the loss in market, we would be the ones to miss out, as we depend heavily on these South African companies. Let’s say DSTV is no more, what’s the alternative Pay TV service? I can’t think of one. Or the ambience of shopping at Game and Shoprite? Can you imagine that? What the RSA government needs to do is try to dialogue with its citizens on the need to promote acceptance of cultural diversity and African unity, and make the citizens, especially the Black Africans, to live up to their national appellation- the rainbow nation.

If these bouts of violence persist, Nigeria may also prevent more South African businesses from entering our lucrative market(although, we may not want to push the ones rooted firmly here). It’s a political risk that South Africa may not want to face. There just needs to be a dialogue for the sake of the prevalence of peace between the Nationals of the two “warring” nations, and also greater law enforcement which will assist in preventing xenophobic attacks against foreign nationals within South Africa. There’s more to gain, if this relationship is healed and not broken-up. The merits are mutual and innumerable, but to foster this relationship, Abuja and Pretoria need to show greater leadership.

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