Nigeria: Why Nigeria Should Not Break Ties With South Africa - Phillips

South African and Nigerian flag.
23 September 2019
interview

The Founder/Chairman of Phillips Consulting, Mr. Foluso Phillips, who is also the Chairman, Nigeria-South Africa Chamber of Commerce, in this interview, speaks on the recent xenophobia attacks against Nigerians and some other Africans in South Africa. Dike Onwuamaeze brings the excerpts:

Can you give us an overview of the Nigeria-South Africa relationship?

I think that is a good starting point. We all are aware of the role that Nigeria played during the apartheid regime in South Africa. There is no doubt about it and sensible South Africans appreciated it. However, they have comparative advantage in manufacturing and industrialisation over Nigeria. And that was very clear when we started to engage with South Africans in 1992. We could see very clear that South Africa, from a technical point of view, was well ahead of the game. The punch line in South African's presence was actually when MTN came into Nigeria.   We cannot blame South Africans for coming into this country to sell their products because they have the goods. South Africa also has a much better structure. Their department of Trade and Industry was one that has pushed aggressively around the whole continent for trade and investment opportunities. These were the things we didn't do. All we wanted was to sell our oil and cocoa. Our strength is in areas like fashion, music and culture and all those things that have to do with individual's skills and ability.

So, what is the level of business relationship between Nigeria and South Africa, especially the value of their investments?

In terms of investments, you will find out that South Africans in Nigeria are very strong in telecoms. They are also into banking through their relationship with Stanbic IBTC and the Standard Chartered Bank. We also know that they have a very strong presence in oil and gas, brewery business, sales outlets like Shoprite, PEP, and in construction works and design. They have subtle presence in professional services like accounting, hospitality, entertainment where Multichoice is conspicuous. I cannot put a value to all these investments, but certainly it should big. We have over 100 South African firms in Nigeria that are registered. But Nigerian strategic investment in South Africa is Dangote's acquisition in the cement industry.  The reciprocal arrangement in terms of Nigerian businesses in South Africans compared to South Africans' business in Nigeria is certainly skewed in favour of South Africans.

What is your view on the xenophobic attacks on Nigerians in South Africa?

It's totally unacceptable. But the attacks, for me, are not really against Nigerians, but against the system that exists in South Africa. The bottom of the pyramid in South Africa, as we can notice, even here is Nigeria, is suffering. They were just saying that they haven't seen any change in their lives in 25 years of independence. There is no way a South African man who is living a normal reasonable life will turn around and begin to attack his neighbours. So, the xenophobia's are simply saying that their lives are not the way it should be.  Their independence gave them freedom they were not prepared for. They were not prepared in terms of human capital development to run a free country. So these attacks on Africans are simply from the attitude that "things are not working out very well for me and you foreigners seem to be doing very well. I can't reach the leadership of my country who I really want to fight and you are the nearest." For me, the attacks are completely unacceptable and South Africa's government must stand up and deal with it. Otherwise the repercussion at the Pan- African level could be quite significant and I am sure we haven't seen the end of it yet.

Why did you say that we haven't seen the end of it?

Because you have to see how things are beginning to evolve. For example, President Paul Kagame of Rwanda walked out of the World Economic Forum that was hosted in South Africa and some other individuals didn't attend. These are expressions of saying how can we be talking about World Economic Forum for Africa and this kind of thing is going on in the country that is hosting the forum. It is a bit of contradiction for that to happen. How the South Africa's government is reacting, the extent of the reaction and the steps it is taking to say this is not acceptable were not enough. Look, there was looting in Shoprite here in Lagos and I know the way the Nigerian Police came down on the looters and arrested over 100 people. There was a positive action from the Nigeria's government to say that we cannot accept this here.

Are you saying that you were not satisfied with the response of South Africa's government on the situation?

I think that a lot more could have been done by both Nigeria and South Africa governments and both governments should accept the responsibility of abandoning diplomacy. I saw a document signed between Abubakar Atiku and Jacob Zuma, when they were vice presidents of Nigeria and South Africa respectively, in which they declared commitment to encourage and protect investments to the extent that that document was saying that if as a result of any uprising or any action of that nature, that the countries will compensate each other for the losses that were incurred because diplomacy was working then. Don't forget that the reason governments talk to each other at bilateral level influence how things are done socially.

Do you foresee South Africa paying dearly in the future if these xenophobic attacks are left unchecked?

Oh yes, it will definitely. Look, I was due to travel out to South Africa on September 10, but I decided not to do so not because I was panicking about my safety. I just felt that the air was very caustic, very tense. If you go and ask South African Airways, I can tell you that the seats occupied in their flight must have gone down. I knew about three people that cancelled their flights within this period. I think that there is no doubt about it that if this thing continues, people are going to stay away because businesses are done through people. And if people fear each other and don't talk to each other, there is no way their business will function.

Have the South African businesses that were shut down in Nigeria due to the reprisal attack reopened?

I do not know. But I know that Shoprite will have major repairs to do because the damages were very significant.  When I saw it on television I wished that they have their insurance. It was a major damage. This is why again we as a chamber formally met with the leadership of Nigerian students union and the Consul General of South Africa when the union were saying that would picket MTN, Multichoice,  and warned them not to begin to shut these places down and carry placards because what usually happens is that area boys and miscreants would jump on the back of what they were doing and it would be out of control. I guess that was what happened when the students went to picket the shops and raise issues and others who were not thinking like them went in and got things out of control. They wanted to do something that would raise awareness of the plight of Nigerians in South Africa. Yes, they have raised the awareness. But what followed it? And we told them that it would get out of their control. And that was what really happened.

You had this meeting before the reprisal attacks?

Yes! In fact, it was as a result of that meeting that their initial attempt to go out was stifled. The commitment we gave them was that we would create a platform for them to see Abike Dabiri, because we didn't have a minister that time. They eventually met and issued press statement. But we have spoken to them before saying don't do this thing. Let find a much more different approach.

Can you give us an estimate of the losses to businesses as a result of their temporary closure?

I will find it difficult to give you something that you can believe. I really don't know.

We are just asking for an estimate?

There has been so much going on in terms of reporting that even I don't know. I don't know the number of Shoprite locations that were attacked; the number of MTN's shops and outlets that were attacked, I don't know. So, it will be a little difficult for me give you any figure. Actually I do not know.

What sectors can make the relationship between the two countries stronger in the future?

Let me say this with responsibility that every sector is open to investors from both sides. What we are failing to do is sitting across the table to say: diplomatically this is how we are going to operate; economically, this is how we are going to operate. These are what the governments should have been doing. We were supposed to have set up during the last administration a Business Council, where the Nigerian businesses and government and South African businesses and government would be meeting. And the protocol was that the business council will met before the bi-national so that the outcome of discussions held at the business council level would be factored into the bi-national for them to come up with the kind of policies that would be driven by people who actually were doing the businesses.  We have complained before that there was not enough private sector input into the bi-national decisions. For me, there is no need government talking to government with businesses being outside.

How did you view the calls for Nigerian government to nationalise South African businesses in Nigeria?

I think that is a very dangerous way to go because it is not just about South Africa. We will be telling others that if they come here and have problems with us, then Nigeria will nationalise their private sector investments. It is not a responsible statement to make if you are a country that is looking for investors because everyone is watching. So, I think the whole idea of nationalising South African assets here is not the way to go. It is very wrong. It is very dangerous. It is a strong negative signal to the investing community. We must separate political relationships from economic and social relationships. For me, I do not think it is an acceptable thing. I even heard that it was said that South African Airways should be banned from coming to Nigeria. Perhaps, we should see that as a temporary measure to just knock someone on the head and say "hey, behave yourself." It should be a way of sending out a warning and not something that should be sustained. But all these depend on the kind of conversations that are taking place between the two governments. The envoy sent by President Buhari did not say that we are going to shoot every South African.

What about the call for Nigeria government to seek redress by taking South Africa to the International Criminal Court (ICC)?

I don't know whether the ICC is the way to go. I truly don't know. But anything that will bring South Africa's government to its senses to appreciate that it cannot continue to mess about with things is fine. The onus is on South Africa more than it is on us, because we have not asked anybody to leave our country. We have not intentionally attacked any of the South Africans assets. The incident that happened here and went uncontrolled wasn't premeditated and our government reacted positively to it. So the onus is on South Africa and it should take responsibility for these things. And if you feel that we need to take them to court for them to sit up, yes! I have no issues with that.

Some are calling that Nigerians should be compensated?

Based on that agreement that I saw and assuming that it was revalidated, this can be possible. But it was not renewed, which was more of an administrative failure. There was no reason for them not to have renewed it. So, assuming that that agreement was renewed then compensation would have been required on both sides. Because Nigeria too have to compensate South Africans for all the damages done at Shoprite, MTN and other South Africans businesses according to that agreement.

Will you call for the renewal of that agreement?

Oh, yes. Because these are the things that make governments to appreciate the responsibilities they have for commerce, business and the society. Yes, I will recommend that they have such an agreement. These are the things that come out of the bi-nationals and the fact that we want to walk with each other. We are talking about the African Continental Free Trade Area agreement. And this development is not going to help. The government must have enough discipline and control to enforce its laws.

What can be done to restore the relationship between Nigeria and South Africa?

The starting point is for the two governments to talk to each other. They have to recognise each other. Years ago there was this great love between Atiku and Zuma. They were great friends, which is always a great starting point because there was a lot that role on the back of that friendship. The presidents of these countries got to take a decision as to the kind of relationship they want, which should be reflected in the way and manner they walk with each other. I am not saying that they should be hugging each other if they do not want to. But the point is that there must be some kind of mutual respects for the responsibilities they have over their citizens are living in both countries that need to be protected. The starting point is for the leaders to say yes we must walk together. Secondly, the governments must put in place structures that will regulate every aspect of our relationship: social, economic, political, to ensures that we are doing things together. Moreover, our fashion, music, entertainment are also a strong point for building strong relationship. Recently, about three or four months ago, some people did a Fela Show in Pretoria, South Africa. South Africans loved the show. When you look at that kind of excitement you will realise that it is a social issue and governments have to promote those things that have encourage interaction of people. Businesses don't talk to each other, it is the people. We have to try and see how we can get people to talk and relate with each other by exploiting the different opportunities that exist for us to interact.

How do we improve the economy to retain more Nigerians here than having them travelling out in droves in search of greener pastures?

The first thing we have to appreciate is that moving the economy forward cannot happen overnight. There is always this initial time that is required. It is not going to be a sudden phenomenal boom. We have a youthful population, which we are saying is a great advantage but it is at the same time a huge time bomb that is ticking. And the global state of play is changing. There are things that we are not good like the technical hard things such as manufacturing, construction. We have never been an economy that is driven along that way. But what we have been improving over and over again is our intellectual ability. Forget the fact that we complain about the quality of our schools, which in itself is an issue. But we are saying that the kind of thinking and the kind of direction in which the global economy is going that is the one that is just picking on your intuition and ability to think. I tell those approaching me to help with their children employment to let their children learn how to write code. Because the way the world is going, the content of artificial intelligence is across every area. We are saying that the new world that is being created is taking every one to the starting point because it never really existed before. And this where our youthful generation should jump unto the bandwagon and see how we can move. And it is already proven that Nigerian youths are intuitively capable young people. Another point is that a lot of young people ask me how they can get on and I always reply them to try and understand the concept of value change. From the minute I plant and crop to the time I buy it on the shelves, a hundred of steps and processes have taken place. Where can you plug into it and say I want to participate in this. It could be transporting the farm products to the market. Or it could be to set up a refrigeration point where fisher men can bring in their fish and store them in cold storage until there is market. Fortunately, or unfortunately, our economy is not one that has got ready paid employment. We are developing an entrepreneurial economy. And that is one thing that is good for us. I am telling you that five to 10 or 15 years from now, we are going to appreciate the power, the thinking, the philosophy and the habits that being cultivated into people to be entrepreneurial. So it is a slow process and we have to decide which part of the economy we want to fit in individually. But the government has to encourage people.

What is your opinion on plan to ban forex for food importation from the Central Bank of Nigeria's forex window?

Every new policy of this kind comes with initial disequilibrium. People will complain that they are not ready and the government will insist that they take the pain because of the anticipated future gain. So, on one part I understand and support where the government is coming from because these are decisions that have been debated over and over before they were launched. But what I feel the government should do is to create an environment that should enable people to be productive to fill the gap created with the ban. What is the government doing to enable people to grow rice locally? Otherwise it will be making policies that are set to punish people rather than growing the economy. A lot of food products sold in the Shoprite were imported at their initial stage. But today Nigerians have stepped in to fill the gaps.

What is your view on the move by the African Export and Import Bank to encourage African central banks to bring home their foreign reserves to finance African trade?

I think that is a brilliant idea. It is such a painful thing where a lot of foreign exchange of countries that we know that we need is tied outside. So, the whole idea that our central bank should bring them home wins my support. Billions of dollars stolen from Africa is starched away outside the continent. That is why they are lending at negative interest rate because they have so much of it. But they lend to African countries and companies at high interest rates. And the money we borrow from them are our money that were stolen from the continent. So we are re-borrowing our money at their supposedly kind good interest rate; Kind enough to do special funds to help Africa; Kind enough to give Africa aids fund and grants. But these are all our money because if you sit down and consolidate the money that is leaving Africa. So I think the bank is pursuing a good idea. Otherwise what else are we keeping money for? What is it sitting outside doing? Look, we need the money here. If the whole of Africa is in serious global debt as a result of serious infrastructural development, I will not bath an eye lid. Because we can point at things we did with them. How can we be funding countries that can buy us a million times? That is what we have been doing.

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