Why Gauteng, Lagos are leading the charge to work together

During a visit to Cape Town in 2013, Nigeria’s former president Goodluck Jonathan said it is imperative for Africa’s largest economies to work together. With this in mind it is hardly surprising that Nigeria’s commercial powerhouse, Lagos, and South Africa’s economic hub, Gauteng are on course to sign a Memorandum of Understanding that will formalise trade and investment relations between the two regions. However this is easier said than done.

According to David Makhura, the Premier of Gauteng, only 9 per cent of exports from the region that he governs are destined for West Africa. It is a fact that is difficult to reconcile when you consider that Nigeria, Africa’s largest market can be found in that region. However, it becomes understandable when you remember that Africa has a poor record for intra-regional trade. The World Economic Forum reports that in 2014, Africa had the lowest levels of intra-regional trade in the world at 18 per cent. In Europe on the other hand, that figure stood at 69 per cent.

It is a challenge that the Premier acknowledges. Speaking at a panel discussion in Lagos organised by CNBC Africa, he said, “The national or federal governments in our country are spending a lot of effort talking about increasing Intra-Africa trade.” However, he believes that there’s work to be done at the lower levels of government too. Citing the closeness that that provincial governments have to the real economy, he said, “the next phase of the development of intra-African trade is when governments below the national government really put in some effort and pull in their businesses and create ecosystems not only where businesses will thrive, but where doing business across the continent will be normal rather than an exception.”

Before the dreams of the Premier can be realised, barriers will need to be broken. Relations between South Africans and Nigerians have been strained as a result of xenophobia. According to Abike Dabiri-Erewa, the Senior Special Assistant on Foreign Affairs and Diaspora to Nigeria’s President Mohammadu Buhari, in the last two years, Nigeria has lost 116 citizens to xenophobic attacks in South Africa. For Foluso Philips, the Chairman of the Nigerian-South African Chamber of Commerce, the solution to this issue lies with the heart. “A lot of people laugh at me when I talk about the Nigeria and South Africa story. I start off by saying we have to learn to love each other and it’s a very fundamental thing.” He said. “The way to deal with this is to begin to get us to understand each other. That’s where you’ll find that the lead should not be economic issues but other cultural and social issues. It’s those interactions that we must have to see that both countries have a lot in common.” He continued.

Premier Makhura was of a similar mind, keen to draw attention to similarities between the two nations rather than stress the differences. During the panel he said, “until South Africa and Nigeria say something you have not spoken in Africa.” Professor Ademola Abass, Special Adviser to the Governor of Lagos State for Overseas Affairs and Investment agreed and stressed the positive results that increased partnership between the two regions could bring. He said, “When Lagos State and Gauteng combine their resources, you’re going to break down barriers.”

READ: Gauteng looks to Ghana to harness investment and trade to drive growth

With every partnership, there are bound to be winners and losers. It is a point that Philips was quick to raise. He emphasised the importance of the relationship between the two regions being mutually beneficial. “As much as South Africa says proudly South African we also want to be able to say proudly Nigerian so if we don’t have enough Nigerians going to do business in South Africa let’s make sure that the business that South Africa does here is one that is engaging Nigerians and employing Nigerians and not one in which we’re very dependent on imports,” he said.

For Toyin Sanni, the CEO of United Capital, the mission to improve relations between the two regions could not have come at a better time. Advising investors to look for opportunities in Nigeria’s infrastructure space, she praised the efforts of the governments of Gauteng and Lagos, and called on the private sector to take advantage of the opportunities that have been created. “The next stage of this will be to have a working plan that involves the private sector champions on both sides that allows them to come up with a wish-list of policy concessions that will be required to drive these initiatives,” she said.

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