Nigeria and South Africa: a Study of Unequal Investment Relations
Total Page:16
File Type:pdf, Size:1020Kb
International Journal of Innovative Research and Advanced Studies (IJIRAS) ISSN: 2394-4404 Volume 6 Issue 4, April 2019 Nigeria And South Africa: A Study Of Unequal Investment Relations Alexander Nnaemeka Agbaenyi, PhD Anselem Okechukwu Chimezie Department of Political Science, Nnamdi Azikiwe University, Awka Abstract: With advancement in Nigeria-South Africa relations, unequal investment became more apparent. South African businesses abound in Nigeria with Shoprite, MTN, Stambic IBTC Bank, Multichoice (DSTV), etcetera featuring prominently. Nigerian companies in South Africa are not dominant in any sector or have any noticeable spread in the economy. This study investigated the nature of Nigeria-South Africa unequal investment relations and factors that hinder Nigeria’s efforts to balance them. The paper is a descriptive as well as qualitative study. Source and method of data collection were based on published online and hardcopy data, and realist theory of power served for explanation. Findings revealed that South Africa’s investments in Nigeria enjoy favorable economic policies and conducive environment and receive enough patronage and profits from large Nigerian population. This situation is reverse for Nigerian companies in South Africa where restrictive laws and unfriendly government polices constitute major challenges. The unequal investment relations between the two countries are the outcome of the struggle to achieve national economic interests with multi-national corporations serving as the suitable tools. Unfortunately, Nigeria runs business deficit in the struggle. The paper recommended the need for good governance and review of Nigeria’s foreign investment policies to make them more mutually reciprocal. In addition, government’s efforts should focus more on self- investment, infrastructural development and diversification of areas of investment than on campaign for Foreign Direct Investment. Keywords: Bilateral Relations, Nigeria-South Africa Relations, Unequal Relations, Investment, Unequal Investment I. INTRODUCTION stronger. This is purely a clear indication that trade and investment conditions in Nigeria are favorable to South Nigeria -South Africa bilateral relations have, no doubt, Africans, hence they take advantage of the Nigerian market lasted over decades. South African investments abound in (large consumer population) and government‟s advocacy for Nigeria and are graciously flourishing. A look at South foreign investment to penetrate Nigerian economy. No doubt, Africa‟s ventures in the Nigeria‟s communication sector is an Nigeria-South Africa investment relations are strong. The epitome of the dominance of Mobile Telecommunication footing was initiated by former Nigerian President, Olusegun Network (MTN), a South African company at the fore front of Obasanjo and his South African counterpart, former President the sector. Its ascendency to the fore is over and above Tambo Mbeki. Entrenchment of civil rule in Nigeria in 1999 indigenous company like (GLO). South African Shoprite in played a major role in the overall friendship and mutual Nigeria is boosting stronger, with its outlets located in, cooperation of the two sister Africa countries. As the rapport virtually, all major cities in Nigeria. Shoprite has continuously matured, unequal relations began to emerge. South Africans advanced in winning the minds of many Nigerians who prefer invested and reaped profits in Nigeria, while Nigerians shopping in Shoprite to shopping in other trading malls or invested and were confronted by restrictions. conventional markets. Many other South African investments A major significant factor in the relations is that Nigeria‟s are also in Nigeria gaining grounds and waxing stronger and investment policies are favorable to the South African Page 45 www.ijiras.com | Email: [email protected] International Journal of Innovative Research and Advanced Studies (IJIRAS) ISSN: 2394-4404 Volume 6 Issue 4, April 2019 investors and hence, growth in South Africa‟s businesses in system. So, despite the above weakness, the theory remains a Nigeria. Yet, in South Africa, reverse is the case. So viable tool for explanation of relations among nations like worrisome is the situation that Nebolisa (2017) observed that Nigeria-South Africa unequal investment relations. Nigerians in South Africa remain antagonized, marginalized Applying the theory on the study, it is evident that South and abused; and their investments do not enjoy favorable Africa, in the quest for economic expansion, made some operational conditions. This is despite Nigeria‟s important groundbreaking attempts that expanded its investments to financial and operational roles in the liberation of South Africa Nigeria with appropriate strategies. This resulted in the from apartheid. establishment and expansion of Shoprite, Stambic IBTC Bank, Hence, the paper investigated factors that created unequal MTN, etcetera in Nigeria. This is a typical pursuit of South investment between the two countries with particular attention African national economic interest. It is made possible by to factors that have prevented Nigeria from creating a balance. South Africa economic, diplomatic and political powers and the pursuit is a continuous process to ensure consolidation and further expansion. Unfortunately, Nigeria was unable to, II. METHODOLOGY adequately, apply the struggle and use power to balance its investment relations with South Africa hence, this study. The study is descriptive as well as qualitative. It relied on documented evidence as source of data collection. The paper presented data in texts, tables and graphs and analyzed them III. BILATERAL RELATIONS qualitatively. Realist theory of power served as theoretical framework for explanation. The theory is an aspect of realist Bilateralism is the starting point of international relations. paradigm of international relation. It focuses on the struggle This is because relations across national boundaries start as for power by nation-states as a way to satisfying their national soon as people from two countries interact. Continuous interests. Machiavelli had earlier argued that man is, by existence of states in this present era requires interdependence nature, selfish. Since man runs the affairs of the state, state is for states to benefit from the achievements of one another and also selfish. Hans J. Morgenthau (1967) believed that power make their successes mutually beneficial. Suffice it to say that was an outstanding instrument in the conduct of international no country is ever self-sufficient. For this reason interaction, relations. He saw power as man‟s control over the minds and cooperation, coalition, partnership and friendship among actions of his fellow man. For him, power was therefore, a countries remain basic necessities in the pursuit of economic, control of a man or a country by another man or country. political, social and cultural interest, among others across Realist theory of power was a framework for explaining national borders. Bilateral relations are also necessary for the international relations. It believed that state was the central or maintenance of peace and security between the countries primary unit of analysis in the international system, therefore, involved. its focus is statist. Realists see the pursuit of national interest The concept of bilateralism is the conduct of political, as the major motivational force to all national political actions economic or socio-cultural relations between two sovereign (Eze, 2017). Realist theory of power maintained that if any states. The definition of the concept is opposed to the concept country can achieve its foreign policy goals in the of unilateralism which connotes activity by a single state. It international system, there is need for power; hence power also contrasts the idea of multilateralism, which is a joint politics characterizes international relations. This comprises relation of multiple (more than three) states. The bilateral economic, military, technological, bureaucratic and socio- relationships of states stem or emanate from the recognition political powers etcetera. Hence, states struggle for power to and agreement by two sovereign states or their people. States achieve their national interests and international relations in with bilateral ties usually exchange diplomatic agents such as realist perspective becomes the struggle for power in an ambassadors, high commissioners and other diplomatic anarchic international arena. personnel to facilitate dialogues, coalitions, interactions and This particular standpoint of the realists has faced serious cooperation. critiques following the obvious emergence and participation of In as much as cooperation must not be undermined as a non-governmental organizations, multi-national corporations major keyword in bilateral relations, competition and conflict and private international individuals in the international are other possible variables. As such, bilateralism transcends system. Multinational corporations, for instance, play major across public, private, institutional as well as administrative roles in the production and distribution of wealth of nations spheres. European Economic Area (EEA) and Norwegian and some of them influence major government policies in their Financial Mechanism Committee (2017) captured it well. host state. Besides, relations among nations are not only for They state: power struggle. There could be genuine assistance of a state Bilateral relations between countries refer