South Africa’s President Ramaphosa and Nigeria’s Muhammadu Buhari. South Africa businesswise behaves like a new colonial master By Jude Fejokwu
South Africa is Africa’s second largest economy, but its most advanced economy. South Africa is competing perennially as the second largest investor (foreign direct investment) in Africa typically behind the United States of America.
South Africa has continually made it difficult for other African countries’ companies to break into its market or export products into South Africa that these African countries have an absolute and/or comparative advantage over South Africa in through protectionist policies and high import tariff barriers.
South Africa’s foray into the continent creates relatively few new job opportunities. This is despite the country being the second largest FDI investor in Africa and its massive investment outlay across the African continent from Morocco to Mozambique.
There are over 60 successful South African companies in Kenya and very few Kenyan companies in South Africa. Tiger Brands owns Haco Industries which is a FMCG company in Kenya established in the early 1970’s. South African insurer Sanlam has a majority stake in Kenyan life insurer: Pan African Insurance Company which is listed on the Nairobi Stock Exchange. Sanlam also acquired a majority stake (50.3%) in Niko Group Uganda in 2014. This deal also gave Sanlam a 49 per cent stake in Niko Group’s insurance business in Uganda, Tanzania, Malawi and Zambia.
South African businesses have benefited a lot from doing business in Mozambique. South Africa’s state-owned Industrial Development Corporation owns 24% of Mozambique’s MOZAL aluminum smelter in Maputo which is the largest foreign direct investment in Mozambique. Mozal is responsible for about a third of Mozambique’s exports. The Development Bank of South Africa and Eskom (South Africa’s power company) provided resources for road and power supply infrastructure to ensure success of the smelter. The total capacity of the Mozal Smelter is about 600,000 tons and is the second largest aluminum smelter in Africa. Guess which country has the largest? South Africa! The Hillside Aluminum Smelter has a capacity of about 720,000 tons. South Africa ensured its aluminium smelter kept the top position and took a quarter of the ownership in its nearest rival. The only word that comes to my mind is: SWEET!
Mozambique issued an $850m ‘tuna’ bond in 2013 which was restructured in March 2016 because Mozambique was struggling to meet repayments. During restructuring negotiations, Credit Suisse and VTB of Russia lent money […]