Transcript Nigeria and South African Relations in the Context of

Afeikhena Jerome
Secretariat of the Nigeria Governors’ Forum
Abuja, Nigeria
GEGAFRICA
Overseas Development Institute, London
8th December, 2014
Afeikhena Jerome December, 2014
7/16/2015
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• 2008 banking failures in the UK and the United States reshaped global
economic governance.
•
The aftershocks of the financial crisis exposed the need for global
agencies which could rapidly allocate resources to prevent countries
collapsing.
• Six years after the global financial crisis, global economic governance
seems not to be responding to the exigencies highlighted by the
crisis.
• Equally missing is a successful engagement of new emerging
economies at the core of global economic management.
• The post-2008 push for reform has run aground.
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• The IMF still awaits implementation of the voice and vote reforms
which would raise emerging economies’ stakes in the core of the
institution.
• The BRICs have become major creditors- In the aftermath of the 2008
crisis, the IMF sought immediately to increase its resources. It did so
by borrowing from wealthy member countries and emerging
economies under the “New Arrangements to Borrow” which saw a 10fold increase in its finances.
• European countries are now by far the largest borrowers from the IMF.
The IMF’s Financial Statements of 30 April 2013, record that European
borrowers account for 89.2% of General Resources Account (GRA)
credit outstanding.
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• The five largest users of GRA credit at April 30, 2013, in descending
order, were: Greece, Portugal, Ireland, Romania, and Ukraine.
• Africa accounted for just 0.9 %.
• The World Bank has not seen emerging economies rushing to increase
their contributions to IDA, nor to double the Bank’s resources, nor
even to borrow from the Bank.
• The new global institution, the Financial Stability Board, is still
woefully short of the legal mandate and inclusive processes which
would draw each region of the world into its standard-setting
process.
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• When President George W. Bush called the first meeting of G20
Leaders in November 2008, the failure of Lehman Brothers had
shaken confidence in markets across the world.
• The sight of the leaders of the world’s largest economies meeting in
Washington DC was reassuring to many.
• After the initial “crisis committee” phase of the G20, the cooperation
achieved by the grouping waned dramatically.
• The G20 as an institution had acquired legitimacy but attracted some
criticism when it designated itself as “the premier forum for our
international cooperation” in Pittsburgh.
• Some smaller emerging markets not in the G20 club, such as
Thailand and Chile, expressed annoyance.
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The G20 Toronto Summit attempted to be more inclusive
than others. It was marked by a much wider participation of
non-G20 countries, including Algeria, Colombia, Egypt,
Ethiopia (NEPAD), Haiti, Jamaica, Malawi (African Union), the
Netherlands, Nigeria, Senegal, Spain, Vietnam (ASEAN).
The G20 having no formal apparatus of decision-making or
report.
Given the flux in the G20, different regions and nations are
quietly holding on to their own ways of managing finance and
creating a more fragmented and decentralized regulatory
regime.
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• Good Growth- Africa Rising but lack of structural transformation
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• Shrinking of the policy space for development.
• A High-Level Committee (HLC) comprising 10 Heads of State and
Government led by the President of Liberia was constituted in May
2013 to sensitize and coordinate the activities of African leaders and
build regional and inter-continental alliances on the Common African
Position (CAP) on the post-2015 Development Agenda. The document
groups Africa’s development priorities into “six pillars.” These are:
Pillar One: Structural economic transformation and inclusive growth
Pillar Two: Science, technology and innovation
Pillar Three: People-centred development
Pillar Four: Environmental sustainability, natural resources management and disaster
Pillar Five: Peace and Security
Pillar Six: Finance and Partnerships
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Comparing Economic Development Indicators
Growth
Country
rank
(20032012)
Health
expenditure Mortality rate
GDP per
Adult
capita
(under-5 per
per capita
literacy
(2005 US$) (current
1000 births)
US$)
Mobile
cellular
Manufactu
Internet
subscripti
Road
access per
ring (% of
ons per
density
100 people
exports)
100
people
LT
Access to
Government
electricity (%
Sovereign
of
Rating
population)
(Moody’s)
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Angola
2685.83
186.26
163.5
70.36
-
48.61
3.46
-
40.2
Ba3
2
Chad
737.55
35.20
149.8
35.39
-
35.49
-
3
-
-
3
Nigeria
1071.52
79.56
123.7
51.08
2.55
67.68
1.74
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50.3
Ba3
4
Ethiopia
253.07
16.61
68.3
39.00
10.37
23.72
0.20
4
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B1
5
Equatorial
Guinea
14198.63
1236.15
100.3
94.23
-
67.67
1.36
-
-
6
Ghana
724.35
75.02
72
71.50
8.57
100.28
2.96
46
60.5
B1
7
Mozambique 417.45
35.22
89.7
50.58
7.46
33.13
1.51
4
15
B1
8
Uganda
405.40
42.40
68.9
73.21
34.18
45.92
1.46
29
8.5
B1
9
Tanzania
483.48
37.33
54
67.80
25.14
57.12
0.75
9.59
14.8
-
10
Sierra Leone
435.41
68.54
181.6
43.28
7.46
36.07
0.67
-
-
-
21
Kenya
594.62
36.25
72.9
-
34.67
71.89
-
10.67
18.1
B1
6003.46
689.27
44.6
92.98
45.38
134.80
83.75
75.8
Baa1
30-35 South Africa
Source: World Development Indicators, 2014
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• Since the advent of democracy in South Africa in 1994, Frosty
relationship has been existing between Nigeria and South Africa
• South Africa’s relationship with Nigeria has been a mix of rivalry,
tension and cooperation. The pattern of interaction has oscillated from
President Mandela’s principled stance against General Sani Abacha’s
dictatorship in the late 1990s, to close and effective engagement
between Presidents Thabo Mbeki and Olusegun Obasanjo during the
last decade.
• Under Presidents Jacob Zuma and Goodluck Jonathan, relations
reached a low-point with the two continental powers unable to reach
agreement on the chairmanship of the African Union Commission in
2012.
• The drive to secure Africa a permanent seat on the United Nations
Security Council.
• Yellow fever vaccine form/ the recent $9.3m cash for weapons scandal
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The rebasing of its GDP in April 2014, to better
reflect the structure of the economy, saw it
surge after South Africa to become Africa’s
largest economy with a reviewed GDP estimate
of $454 billion in 2012 and $510 billion in 2013
(compared with the $259 billion and $270 billion
that were reported previously).
Result of the Rebasing
Since the Nigerian rebasing of her GDP, which
put the country ahead as the biggest African
economy ahead of South Africa, some in the
South African government circles have been
irked by what they consider to be the “artificial
claims” about the Nigerian economy compared
to South Africa.
Source: McKinsey and Co 2014
Olu Ajakaiye and Afeikhena Jerome
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• Notwithstanding the stresses emanating from the official strategic and
diplomatic agendas, including people-to-people relations, commercial
exchanges have strengthened considerably since the democratic
transitions in both countries in the 1990s.
• More than 100 South African firms now operate in Nigeria. South
Africa's mobile telecommunication giant, MTN, is only one of these
that have prospered within Nigeria's large internal market of 160
million people, servicing highly profitable sectors across banking,
retail and media.
• Also, Nigerian conglomerates such as Oando Plc (listed on the
Johannesburg Stock Exchange) and the Dangote Group (with
investments of nearly $400m in cement production in South Africa)
have been at the forefront of consolidating commercial ties.
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• Still, nothing in the fundamentals of both countries’ relations
precludes working together, much as China and India’s rivalry and
mutual suspicion has so far not foreclosed the possibility of their joint
engagement on regional and global interests.
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• The unique phase marked by the Obasanjo-Mbeki era when both
countries were at the helm of a reform agenda for the African continent
- most visibly expressed through their joint leadership of the NEPAD
initiative created in 2002 – can be replicated. However, in marked
contrast to that activist period, both countries’ current Presidents do
not have a hands on approach to African issues.
• Going forward, there is a need for a more strategic use of the South
Africa-Nigeria Bi-National Commission. Its workings and agendas need
to be aligned in ways that allow a deeper, more sustained dialogue
covering issues of convergence, including the contentious ones.
• Crucially, the highest levels of political leadership in both countries
also need to become more centrally involved in the management of the
key irritants in the relations, such as mutual visa regimes, treatment of
respective nationals and at main international entry ports as well as in
the provision of effective and adequate consular services.
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Thank you for your attention
Email: [email protected]
]
Afeikhena Jerome NES 2014
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