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Why Nigerian and other foreign companies fail in South Africa: Union

By News Express on 14/03/2016

Views: 3,281


The Union of Nigerians in South Africa says protectionist laws are stifling foreign companies operating in the Southern African country.

The President of the union, Mr Ike Anyene, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja on Sunday.

Anyene said that the laws were crafted to favour South African companies and businesses at the expense of their foreign counterparts.

NAN recalls that during his recent two-day visit to Nigeria, President Jacob Zuma of South Africa had acknowledged that the number of South African companies in Nigeria grew from four in 1999 to 120 in 2016.

Anyene, therefore, said: “We cannot say that there is any big Nigerian company in South Africa.

“The enabling environment for the success of Nigerian businesses and other foreign businesses is not there in South Africa.

“There is enabling environment for them in Nigeria, which is why they are trooping into Nigeria.

“We have Nigerians that can invest in South Africa.

“Dangote has invested in South Africa; he could have invested more, but there was no enabling environment.

“The South African president has promised to improve the environment for Nigerian businesses.

“Nigerian companies are not trooping to South Africa the way South African companies are coming to Nigeria.”

Also speaking, the Head of Policy Formulation of the union, Mr Matthew Okafor, said that, many companies, the Dangote Group, had tried to penetrate the South African business environment, but failed.

He said that the protectionist laws of the South African government discouraged the flow of Foreign Direct Investment to the country.

According to him, as a result, many large corporations that have succeeded elsewhere are failing in South Africa.

“Thisday Newspapers came into South Africa, set up shop and was printing in South Africa.

“Today they are out of South Africa; they were squeezed out of the market. What happened? The cost to entry into the market was very high.

“In South Africa, the system is not designed to encourage that level of entrepreneurship coming from outside.

“There are active laws of protectionism in South Africa, but it is free market in Nigeria, where government encourages Foreign Direct Investment (FDI) to Nigeria.

“The main factor that led to ThisDay Newspaper leaving was because they were renting the press at a very exorbitant price and they have very controlled prices in South Africa.

“Even Barclays Bank is going to pull out of South Africa next week.

“Barclays has been all over the world; even to Hong Kong and they are still in those countries but they are pulling out of South Africa because of the stringent exchange control laws.

“The Australian Mining Company is going to leave South Africa also.

“They are divesting because of all these protectionist laws that are set up to make foreign investors to fail.”

He decried a situation where the South African government prevents companies operating in its territory to repatriate their profits to their home countries, whereas South African companies operating in other climes are allowed to.

“MTN is doing well in Nigeria but the same cannot be said about Nigerian companies in South Africa.”  (NAN)

•Photo shows President Zuma.

Source News Express

Posted 14/03/2016 2:29:46 PM

 

 

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