Adetunji Omotola
I was profoundly surprised and delighted when I saw the recent article by South Africa’s Deputy High Commissioner to South Africa, Dr Bobby Moroe, in the Daily Maverick online column Opinionista entitled ' South Africa and Nigeria – the continental giants with a sometimes uneasy, but always symbiotic relationship’ (https://bit.ly/3jmjy1O).
In my decade as an Africa analyst, I have rarely seen an article written by an African diplomat, so this is very encouraging. But I wish to add to his information contained in the following paragraph.
‘The top South African investors in Nigeria are the MTN Group, Remgro, Shoprite, Pick ‘n Pay Holdings, Black Rhino, Pep, Standard Bank Group, Clover Industries and Naspers. A total of R2.67bn from six Nigerian companies has been invested in South Africa between 2008 and 2020. Dangote and GZI are the most significant, accounting for 95% of the total FDI from Nigeria into South Africa.’
My aim is to embellish Dr Moroe's article by providing more examples of Nigerian businesses in South Africa as I believe that the Ambassador did not give the full picture when speaking about their presence in the country.
It is also instructive to note that about a dozen or so Nigerian businesses have entered the South African market with little success and have subsequently exited. These businesses cover aviation, media and banking. The notable ones are ThisDay newspaper, Financial Standard, Arik Air and Bellview Airlines while Union Bank, Zenith Bank and First Bank of Nigeria, three of the country’s biggest banks, had representative offices in South Africa for some years.
Many Nigerians believe that South Africa is a hostile environment for Nigerian companies to trade whereas there are at least 120 companies from South Africa doing business in Nigeria, including MTN, which was issued a license in Nigeria 20 years ago.
Dr Moroe only referred to Dangote Cement and GZ Industries, but several other companies have emerged. For example, Nigeria’s Access Bank Group, which had over 30 million customers with revenues of over $1billion in 2020, bought South Africa’s Grobank, formerly the Bank of Athens, for $60m in 2021. Grobank was formerly a specialist agricultural bank.
This is the first transaction where a company with truly deep African roots has secured a controlling stake in a bank in South Africa. In the words of Bennie Van Roy, Managing Director of Access Bank South Africa, the transaction is critical for the group and gives it the opportunity to expand its footprint into Africa's most sophisticated banking sector in line with its strategy to become Africa's gateway. Access Bank South Africa has indicated that it plans to launch at least three physical branches before the year end. The bank will also provide digital services, targeting immigrants and those in the diaspora who call South Africa home.
Paystack, a Nigerian fintech company has also come into the market. Paystack was bought by Stripe, a Silicon Valley company, last year for $200 million. Paystack currently processes more than half of all online payments made in Nigeria and the six-year-old firm is set to challenge Yoco and PayFast on South African soil. It is already undercutting its competitors with low transaction fees.
In the aviation space, Air Peace commenced twice weekly flights between Lagos and Johannesburg on 17 December, 2020, a development facilitated by the implementation of the Bilateral Air Service Agreement, which was signed during President Buhari’s state visit to South Africa in October 2019. It is currently the only airline that flies direct between the two cities.
Toyin Olajide, Air Peace’s Chief Operating Officer, said the flights were a way to further deepen the bilateral and economic relationship between the two countries. The service, she indicated, was a response to a yearning from people in Nigeria and our brothers and sisters in South Africa.
It is clear that in spite of the pandemic, which has affected businesses around the world, Nigerian businesses have huge ambitions to enter the South African market and the wider region by extension.
In addition to the Nigerian businesses entering from Nigeria, there are many Nigerian businesses that have been established in South Africa by Nigerians living here.
This is shown by the rapid growth, for example, of Nigerian restaurants, a new trend that has been spurred on by the reality of COVID-19 lockdowns. In the past few years, more than 10 Nigerian restaurants and food outlets have opened in Johannesburg, and they all seem to be doing very well.
One of them, Jummy's Kitchen, was an entrant in the recent the Jollof Wars competition between Ghana and Nigeria held on Youth Day in South Africa at a Congolese restaurant in Johannesburg, Karibu Wote. Other Nigerian-owned restaurants in Gauteng include Kitchen Vibes, Hombaze, Mama Putt and Jollof Cafe.
It is also true that Nigerian music as well as Nollywood movies have become embedded in the sub-culture of South Africa. On the day Chelsea beat Manchester City to win the UEFA cup, Nigerian singer Davido was at a Sandton Hotel serenading some of his fans in an exclusive performance. Nigerian music is played in many South African entertainment outlets and South Africans cannot seem to get enough of it.
Adetunji Omotola is an independent Africa analyst. See his website ADETUNJI OMOTOLA – African Enthusiast