Trade and Industry Minister Dr Rob Davies took the high road when responding to news that Nigeria had officially surpassed South Africa as the continent’s largest economy.
Following a rebasing of its gross domestic product (GDP), Nigeria’s statistician-general announced on April 6 that the West African country’s GDP stood at more than $509-billion. South Africa’s nominal GDP, by contrast, was estimated at around $350-billion.
Firstly, Davies argued that the development should not be surprising, owing to the fact that, at 170-million, Nigeria had a population that was more than three times that of South Africa. Secondly, he said South Africans should welcome the news, because “if Nigeria grows, develops and industrialises, that provides opportunities for us”.
“Why should we be concerned? This is not the Absa Currie Cup and certainly not the second division where we want Nigeria to be poor so we can be higher than them in the league table,” he mused.
A conversation is reportedly already under way about the possibility of supplying semi-knocked-down automotive kits to Nigerian companies keen on developing a domestic automotive industry. “That’s part of the way forward. As Africa industrialises and grows and develops, so the opportunities for us are going to be greater.”
There is little question that Davies’ reaction is both sensible and analytically sound. It is also reinforced in the latest version of South Africa’s Industrial Policy Action Plan, which emphasises the need to grow exports and expand value chains into the rest of the continent as a part of a broader effort to raise South Africa’s manufacturing competitiveness.
That said, the initial reaction of some commentators suggesting that the development should serve as a wake-up call to South Africa is neither surprising nor should it simply be dismissed (no matter how misguided and narrow minded such a view may appear at first).
There is no question that South Africa’s investment climate is a long way from where it should be, as epitomised by an unflattering Economist article on South Africa under the headline ‘Why invest?’.
Both domestic and foreign investors are justifiably concerned about the labour climate, while South Africa has not been forthcoming enough in explaining the termination of bilateral investment treaties, or changes to its black economic-empowerment policies.
Much could be achieved simply through more effective communication, with Davies’ assurances on the Investment Bill making a lot of sense. For instance, he highlights that the property rights clause in the Constitution lies in the same category as the restoration of the death penalty. “In practical terms, neither of those is on the cards – you need a special majority and the say-so of the Constitutional Court. It’s not going to happen.”
But it should also not be forgotten that how one behaves is more important than how one communicates. For this reason, President Jacob Zuma’s recent snub of the Africa-European Union summit was not only ill advised, but represented a missed opportunity to help restore a sense of perspective about this country’s potential as a gateway to Africa.