South Africa New Trade Deal: Anything to Cheer?

Friday, October 11,
2019 / 03:00PM / United Capital Research / Header Image
Credit: @NigeriaGov

Africa’s two largest economies, Nigeria and South
Africa recently decided to mend relations, after a two-day visit by President
Muhammadu Buhari to South Africa. In the spirit of economic integration, the
two parties signed about 30 trade deals and cooperation agreements, spanning
across international trade, mobility and measures to prevent further
inter-country hostility.

The agreement, deemed to deepen trade ties between
the two countries, included vital sectors such as trade and industry, science
and technology, defense, agriculture and energy. Also, both parties reiterated
the need to kick-start the issuance of 10-year visas to businessmen, academics
and frequent travelers, to promote friendly relations. In order to avoid
recurrence of attacks, an agreement was also reached, to create ‘early warning
mechanisms’, which will speedily detect hostility between the two
countries. Overall, the outcome of the
meeting is positive for the continent considering their shared
economic size in the region.

South Africa remains an important trade partner to
Nigeria, being Nigeria’s 7th largest export partner, valued at N2.5bn as at
Q2-19. In our view, the new deal between Nigeria and South Africa is a step in
the right direction as this will foster the success of the African Continental
Free Trade Agreement (AfCFTA), which is heavily reliant on both economies.

Top African Stories

Zimbabwe Hikes
Electricity Tariffs by Over 300% as Crisis Deepens: The energy price hike comes
at a time of daily rolling power cuts which have plunged parts of the country
into darkness for up to 18 hours a day and forced businesses to operate at
night. Read
moreSudan appoints first
female judiciary head to fight corruption: Sudan appointed a woman as the head
of its judiciary on Thursday for the first time in the history of the Arab
Muslim country, the ruling Transitional Sovereignty Council said. Read
moreWorld Bank sees
Algeria’s 2019 GDP growth at 1.3%: The World Bank said on Thursday it expected
Algeria’s economy to grow by 1.3% this year, down from 1.5% in 2018 and lower
than the government’s forecast of 2.6%, due to “political
uncertainty”. Read
moreRwanda launches first
‘Made in Africa’ smartphones: Rwanda’s Mara Group launched two smartphones on
Monday, describing them as the first “Made in Africa” models and
giving a boost to the country’s ambitions to become a regional technology hub. Read
moreU.S. Treasury sanctions
Gupta family, associate over S.Africa graft: The U.S. Treasury on Thursday
sanctioned three members of the Gupta family, friends of former South African
President Jacob Zuma who are accused of influencepeddling, and their business
associate for their involvement in alleged corruption. Read
moreSouth Africa, Nigeria
mend relations and agree trade deals: South Africa and Nigeria signed 30 trade
and cooperation agreements on Thursday, weeks after a wave of violence against
Nigerian nationals in Johannesburg and Pretoria had strained relations between
Africa’s top two economies. Read
more