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A MINISTER in an African country that shall remain nameless was relating his experience of joining the government from the private sector at a dinner at a recent African business conference. He said the need to observe official protocol was one of the biggest challenges of transferring from an environment of informality in business to the public service.

Simply walking out of his office to speak directly to an official about an issue, rather than working through the chain of command, had thrown his ministry into panic mode, he said — so steeped were they in following procedure. In fact, protocol and procedure had, he found, become an end in themselves and adhering to them appeared to be more important than achieving an outcome. “Actually getting the job done doesn’t seem to be part of the deal.”

A recent survey conducted by the World Economic Forum among 300 of its Young Global Leaders across 70 countries, including many in Africa, found that most would like to join the public service to have the opportunity to make a difference and be part of decision making — and because of dissatisfaction with the current leadership. However, they were unwilling to do so because of their negative perceptions about public service, which included excessive bureaucracy, exposure to fraud and corruption and inadequate pay.

A further deterrent was the perception of public service being a second-rate employment option where values such as accountability, transparency, ethics and innovation were not in evidence. Many viewed the sector as a closed shop, with key appointments linked to political patronage rather than merit.

Another dinner speaker said people with ambitions to improve the performance of government often believed they could work within the system until they attained a leadership position that would allow them to effect change. But that is a pipe dream. More often than not, people get sucked into the system and become part of the status quo rather than a force for change. Or they leave. It is difficult for individuals to change the rules of the public service game and that is why mediocrity and process trump innovation and vision.

Young and talented leaders who may aspire to public service are taking their skills to the private sector rather than fighting for influence and change in government systems dominated by party political agendas and patronage.

Is this an unchangeable reality that we have to live with? Or could the slow but steady improvement of political leadership in Africa mean that, at some point, the bureaucratic system will begin to improve? African governments are facing a new world that is driven by technology and increasing access to information through the internet. Social media and blogging have become ways for citizens to examine and criticise inefficient and corrupt governments and to find information that will ultimately allow them to make more informed choices at the ballot box.

More than ever, Africa needs a new kind of leadership both to build on the gains of improving governance and to drag the spoilers, of whom there are so many, into a new era.  A reformed and vibrant public sector might even lure skilled Africans back to the continent. But they will not give up prosperous lives abroad to enter a system that stifles innovation and new ideas.

Talk of political change tends to focus on a change of president, minister or official. The whole system of government, including the public service, must be reviewed if Africa is to position itself for a more successful future.

 As bureaucracies deal with public money, some rigorous order and checks and balances are necessary. But some elements of private- sector models could be introduced to make the public service more dynamic and results-orientated. Already, new partnerships between business and states have allowed some fresh air to blow through the corridors of power. 

Changing entrenched mindsets and attitudes through the chain of governance is a long process but it needs to start somewhere. If Africans do not start now putting measures in place to foster a new generation of leaders in governance structures, leaders that have change and innovation rather than patronage and process as core drivers, in 50 years’ time Africa will be little changed from what it is today.

ARE South African companies damaging relationships with other African countries by not playing by the rules? 

This politically sensitive issue, which has dogged SA-rest of Africa ties for nearly two decades, came to the fore again last week with the release of a report by the Open Society of Southern Africa on the behaviour of South African miners in the region. A survey of selected companies operating in southern Africa found the practices of South African mining companies to be “appalling”. These include lax environmental standards, a failure to keep promises development agreements, wage differentials between locals and expatriates in similar jobs and a lack of upliftment of communities.

The report, South African Mining Companies in Southern Africa: Corporate Governance and Social Responsibilities, also details many excellent programmes and activities of mining firms . But it is the dirt that sticks and the findings will, rightly or wrongly, tarnish the image of all companies.

 South African companies come under greater scrutiny in Africa than investors from elsewhere , partly because of the tendency among South Africans to occupy the moral high ground in dealing with other Africans, based on the size and relative sophistication of their economy. Locals criticise the way some South African firms “swagger” into their countries. The poverty, rundown infrastructure, often corrupt or unsophisticated governments and other aspects can encourage corporate behaviour unacceptable at home.

A lack of regulation and monitoring of environment standards, compounded by the sometimes poor behaviour of local companies, makes it easy for foreigners to drop their standards in countries such as the Congo and Angola. But company ethics should be the same wherever a company operates. Otherwise what is the point ?

Being the regional economic power imposes particular obligations on SA, particularly business, to engage positively with neighbours. The report reiterates the oft-stated call for the government to design guidelines for businesses operating across the border.

The nationalisation debate g aining ground in Africa has upped the ante for good corporate behaviour in the resources sector. No excuses are needed for more regulation and greater state intervention. While Zimbabwe’s indigenisation laws may be considered to be extreme, the concept of greater local empowerment is generally embraced in Africa. And the focus elsewhere, as in Zimbabwe, is on the resources sector.

Tanzania, often praised for being investor friendly, sent shock waves through the mining sector last week when it announced a new law that provided for the state to have a stake in all future mining projects. The government also said it would no longer issue gemstone licences to foreign firms.

The relevant minister said the law was not enacted to please investors but to safeguard Tanzanians’ interests . That is the new direction Africa seems to be taking, as governments tread the fine line between attracting foreign investment and satisfying growing demands for local ownership.

Resource companies need to raise standards, not lower them, and to build relationships with host governments to ensure their continued welcome. Corporate social responsibility programmes should be as inclusive as possible, no matter how excessive expectations of communities and governments on noncore development are.

But African governments also have a responsibility here. Mining companies complain about their hosts breaking entry agreements, policy unpredictability and onerous and multiple financial obligations.

Governments’ investor unfriendly actions tend to be defended on the basis that the state is the victim in any relationship with multinationals because officials do not have the expertise to negotiate big deals with company executives used to hard bargaining in well-resourced western states. But that view negates the obligations of the state to negotiate for its future. If a country does not have the capacity to do so, then it should make it a priority to build — or buy — it.

 South African firms face rising competition in Africa’s mining sector. They need to exploit their competitive edge as a fellow African state by ensuring exemplary corporate governance and a strong empowerment focus

THE Nigerian government is busy with legislation which, if passed, will make it mandatory for companies to pay 3,5% of their gross profit to corporate social responsibility (CSR) initiatives. The proposed Corporate Social Responsibility Bill allows for a great deal of state meddling in companies’ affairs and suggests onerous punishments for noncompliance, including hefty fines. The move has not been well received by business — unsurprisingly.

This is not only because of the potential for such an initiative to become just another graft opportunity, nor because companies do not support better CSR, but because they already operate in one of the highest cost environments in the world as a result of state inefficiency.

In addition to tax and other obligations, companies also have to act as mini municipalities, providing their own power and water and services provided by the state in other countries.

The bill, which focuses on the community investment aspect of CSR, has generated a lively debate in Nigeria about what obligations should be brought to bear on the private sector. It is generally accepted that companies operating in poor countries, particularly foreign multinationals, do have a responsibility to help the communities they operate in. But their efforts, which are often derailed by competing local interests and arguments about who represents communities, have come under fire from citizens for not going far enough.

Community CSR is generally viewed as the building of schools, clinics and soccer pitches. These ad hoc interventions just feed the view that such spending is window dressing for exploitative business behaviour that produces outrageous profits. But many CSR budgets are significant and could be harnessed more meaningfully for development and growth in a collaborative engagement between government and companies.

The idea that CSR investment would be more effective if such spending was included in a country’s development priorities was raised at a CSR workshop I attended in Liberia recently, with participants from the US, China and countries in Africa.

Dovetailing corporate activities with “sovereign CSR” — an obligation by governments also to improve the lot of the poor in their countries — would not preclude local community programmes, which are important, particularly for resource and telecommunications companies that operate in remote areas. But it would allow companies to invest in broader development that may, in the longer term, improve their operating environment and help the bottom line. This could include measures to increase skills and reduce business costs.

This will, of course, only work in countries where governments have the vision and will to look for creative solutions to development challenges. And working closely with governments in a noncore area also raises the question for firms about where the line is drawn. Large companies operating in Africa complain that they are already easy targets for governments looking for new funding sources. In most countries, a handful of companies comprise almost the entire tax base and governments focus more on wringing money out of them than increasing the number of taxpayers. Companies also contribute by generating jobs and increased economic activity — though critics focus narrowly on their profits.

The expectations of foreign companies are very high in Africa, particularly in the resources sector where they often replace the state in terms of infrastructure delivery and social services. The Democratic Republic of Congo has taken this one step further, with the government of mineral-rich Katanga province threatening to ban mining companies’ exports if they do not grow crops for local consumption.

These pressures do not remove the obligation to invest in community projects as part of a formal CSR strategy. Multinational companies at the Liberia event believed that making CSR investment mandatory would be counter- productive, particularly for smaller companies, although they agreed it would be useful for states to produce a set of published guidelines that would apply to foreign and local companies.

The Brenthurst Foundation, a partner in the Liberia event, has drawn up the Monrovia Principles, designed to kick-start African debate on CSR driven by Africans and which imposes obligations on government and business.

 Companies operate best in an environment of enlightened self-interest and governments need to focus on growth. Combining these is not an unworkable plan; it just makes sense.

EMMANUEL Munyukwi, CE of the Zimbabwe Stock Exchange (ZSE), has had a stressful time during Zimbabwe’s lost decade — keeping interest alive in a stock market increasingly disconnected from the rest of the world. Hyperinflation, peaking far north of the last official rate of 231-million percent, a government driven by political expedience and a currency in freefall were just some of the other headaches Munyukwi, along with the rest of the country’s business sector, had to cope with over the past 10 years.

The ZSE saw foreigners pulling out and local companies using the exchange as a hedge against inflation. In 1997, 30% of trading was driven by foreigners; in 2008 it was closer to 2%. The exchange became a repository for trapped local savings. The scramble for assets saw share prices rise by hundreds, and sometimes thousands, of percent daily. The ZSE was touted as one of the best-performing exchanges in the world, with the benchmark industrial index rising more than 12000% in 2007 — although few outside the country were prepared to trade on it.

But Munyukwi says he is relieved the ZSE is back in the real world, dealing in a different kind of dollar — and in the kind of numbers not just Zimbabweans can follow.

The ZSE chief was recently appointed chairman of the Committee of Southern African Development Community Stock Exchanges (CoSSE), taking over from Geoff Rothschild, head of international relations and government at the JSE. Munyukwi hopes the position will put Zimbabwe back on the investor map and increase the visibility of the stocks on one of Africa’s oldest and biggest exchanges.

CoSSE was established in 1997 to increase co-operation and links between stock exchanges in the Southern African Development Community (Sadc) region and to find ways to make Sadc stocks more attractive to investors. Its members are SA, Namibia, Botswana, Mauritius, Mozambique, Swaziland, Tanzania, Malawi, Zambia and Zimbabwe.

The ZSE, which Munyukwi has headed since 2002, has more than 80 listed counters and its market capitalisation at the end of 2009 was 4bn, a big jump from March 2009 when it stood at 1,6bn. High transaction costs, more than double those in the region, have been cut and the ZSE is poised for growth.

Analysts predict the value of the exchange will rise to nearly 12bn over the next three years. However, Munyukwi is not setting his sights too high just yet. The political environment is far from settled, he says, and that means investors are not plunging into the market.

Investor skittishness has been compounded by the recent gazetting of the Indigenisation and Economic Empowerment Regulations, which will force larger companies to give at least 51% of their shareholdings to black Zimbabweans. The industrial index has shed a cumulative 20% since the move and political leaders’ contradictory statements on the issue have not helped to allay investor fears.

Munyukwi says the “big bang” approach to indigenisation has revived fears of asset seizure. He believes the approach should be a carefully managed process. He said the government itself had, by halting privatisation a decade ago, thwarted local empowerment through the ZSE.

Munyukwi cut his teeth in the financial world as a banker at Standard Chartered Bank in Zimbabwe. He moved to listed manufacturing conglomerate Art Corporation as group treasurer before joining the ZSE as deputy CE in 1998. He was promoted to CE in 2002. He lists the highlights of his time at the helm of the ZSE as being the creation of an independent market regulator, the Securities Commission, and the regional harmonisation of listing requirements.

But his tenure has been marked more by challenges than highlights. “It has been a very stressful time, particularly the past three years which have seen some big challenges,” Munyukwi says.

The bad times for the ZSE, and the economy as a whole, began on Black Friday — a day in November 1997 when the Zimbabwe dollar lost more than 70% of its value against the US dollar and the stock market crashed as investors fled. The crisis was largely precipitated by the government’s unbudgeted payouts of millions of dollars to 50000 protesting war veterans at a time of mounting economic problems. The economy has only gone in one direction — down — since then.

While the ZSE saw brisk local trading, its relative success at home made it a government target. In 2008, it was accused by the Reserve Bank of Zimbabwe of being a “weapon of economic genocide” for attracting money away from government instruments, which were not producing sufficient yields to counter rising inflation, unlike the ZSE.

In November 2008, it was instructed by the central bank to suspend trading amid allegations of improper dealings by stockbrokers. When it resumed trading in February last year, transactions were denominated in US dollars, reflecting the dollarisation of the broader economy since late 2008.

The move to a hard currency has removed significant currency risk for investors. Munyukwi says companies that had stocks on the ZSE benefited from an automatic revaluation of their assets from the worthless Zimbabwe dollar and some firms, such as Econet, have done exceptionally well. Other challenges include low liquidity in the market — about 1,5% currently — and the fact it has yet to become automated.

He says the market needs to grow and become more diversified. Currently, only 10 companies make up 65% of market capitalisation — Delta, Innscor, Barclays Bank, Old Mutual , Econet, Aico (formerly Cottco), CBZ, Hippo Valley, Seedco and Lafarge Cement. Trading has picked up in the past year as interest in Zimbabwe’s undervalued assets grows and rights offers have been well subscribed, although Munyukwi says local institutions still dominate the market — something that he would like to see change. “Over the past 10 years we have not been affected by international events but now we are re-engaging, companies have to be better geared.”

One of Munyukwi’s key responsibilities as chairman of CoSSE is to oversee the launch of a hub and spoke interconnectivity platform driven by the JSE, which will enable stocks to be traded across 10 exchanges in the region. Munyukwi is upbeat about the prospect of closer integration with Africa’s biggest exchange. He says it is necessary to give bigger companies in smaller markets the visibility they need to raise capital and improve information flow.

He says there have been concerns about the JSE dominating smaller exchanges. “But its intentions are good and it is really a win-win situation, particularly as it will give comfort to foreign investors who want to reduce their risk. It is a reality that what the JSE trades in a day, other Sadc exchanges do in a year.”

Future plans include the establishment of bond and futures markets and there are plans to demutualise the exchange. The Securities Commission of Zimbabwe is also working on statutory instruments to address insider trading and disclosure issues.

“We have lost 10 years. But we are now confident our economy will recover and the stock exchange must play its part in that recovery by helping companies to raise capital and to enable the country to rebuild its infrastructure.”

It is not every day I get cajoled to sing happy birthday to President Robert Mugabe.

The old man, guest of honour at an African tourism conference in Harare last week, looked pleased as the praise singers that surrounded him (otherwise known as government officials) cranked out the ‘happy birthday’ tune to mark his 86^th birthday, exhorting, with limited success, the delegates to take part.

This fawning exercise diverted the otherwise informative event from its business – and annoyed many Zimbabweans who muttered about it after the Ego had swept from the room.

Chief among the sycophants was Zimbabwe’s tourism minister who conveniently forgot the president has been responsible for the sector’s hardships over the past decade. Still, some said Mugabe’s appearance was no more outrageous than his brazen attendance at international food forums.

The elephant in the room during the tourism event was the recently gazetted indigenisation law, which forces all foreign investors with businesses worth more than $500 000 to cede 51% of their enterprises to black Zimbabweans over five years. The legislation, which runs to more than 100 pages, provides for hefty fines and a five-year jail term for directors and company owners who violate it.

Ministers called for investment in tourism and related sectors but made no mention of the new regulations. Mugabe’s speech referred obliquely to partnerships.

At the closing lunch, Deputy Prime Minister, the MDC’s Thokozani Khupe, broke the conspiracy of silence, saying the ministers of Economic Planning (MDC) and Youth Development, Indigenisation and Empowerment (Zanu-PF) had “taken note” of concerns and the law would go back to the drawing board.

Her statement contradicted the Indigenisation Minister’s earlier insistence that the law was irreversible while Mugabe, after the conference, told reporters investors should be grateful for a 49% stake, saying it was a lot of equity. He did not mention a change of plan. The cracks were showing.

Two days later, the government issued a statement saying only the Indigenisation Minister was allowed to speak on government’s behalf about the empowerment law.

This effectively means the legislation will not change as that minister is a major proponent of it. The MDC, already ineffective in stopping land seizures, looks like it has been snookered.

Zanu-PF “owns” the law and after sitting on it this long – since 2007 – is not going to back down now. It knows what the response will be and is pushing it as part of a bigger, undisclosed plan.

It will counter MDC accusations of improper process in gazetting it with the defence that it is acting within the law. As with the land seizures, Zanu-PF has been careful to give its agenda to expropriate assets a veneer of legality.

Zimbabwean business people I spoke to said the principle of empowerment was well accepted but the new law’s onerous provisions were detrimental to economic revival.

They pointed out that most sectors of the economy had become largely indigenised over time by default and there was no need for such stringent conditions. There were also concerns about a sinister agenda by Zanu-PF.

They said targeting foreign investors in this way was a looting opportunity, not a real empowerment plan. There are not many Zimbabweans outside the political elite who are well capitalised enough after a decade of recession to afford big stakes in foreign companies.

The government has, however, suggested the establishment of an empowerment fund to facilitate deals – and companies are bracing themselves for a hefty levy to finance it.

The timing of the gazette is important. The legislation is not new. It passed through parliament in October 2007 and the president signed it in April 2008.

One body of opinion believes Mugabe has his eye on a 2011 election and will use the empowerment drive as a bait for votes – or as a stick to beat the MDC for failing to improve the economy, the poisoned chalice its ministers were given.

There is also the view that the law will be applied selectively to boost the fortunes of a few, taking advantage of the lack of transparency in the business landscape.

A third aspect is that Mugabe is annoyed that international sanctions against him are still in place and wants to remind everyone that he is still the boss.

IN 2008, after months of delays, the Zambian government finally gave in to public pressure to capture a greater share of profits from the commodity boom by introducing a windfall tax on minerals, raising mining royalties and hiking corporate taxes.

The measures, which came into effect in the April 2008 national budget, raised the effective tax rate from about 30% to 47%. The move raised a howl of protest from mining companies, which said it violated investment agreements with the government.

Months later, the global economic crisis kicked in, commodity prices plunged and Zambia’s foreign currency revenues started drying up as investors fled, expansion plans were put on hold and exports dropped.

The windfall revenues raised were used mostly to prop up a devaluing local currency, hard hit by these whirlwind events.

A year after introducing them, the government, panicked by the rapid decline of exports and investment, scrapped most of these taxes and even introduced new measures to relieve the mines’ high operating costs. Zambia was left not only financially worse off after the dust of the global crisis settled, breaking agreements with foreign miners had also tarnished its reputation as an attractive investment destination.

With the increase in copper prices during last year , pressure is mounting again for the mining tax issue to be revisited. The government is resisting — but 2011 is an election year and could mean knee-jerk policy reactions.

The Zambian story reflects some of things that are wrong with resource- rich countries in Africa generally . One is the issue of investment agreements. Many of Zambia’s mining contracts were negotiated from a low base after the nationalisation of the mines destroyed the mining sector and the government sought investors to take over its poorly functioning assets at a time of low prices. Investors negotiated good deals for themselves and no accommodation was made for price swings.

Zambia also failed to use the revenues it did generate during five years of high commodity prices to diversify the rest of the economy sufficiently to accommodate any major downturn in its key revenue-generating sector.

The global financial crisis is not the main reason for the problems that they are experiencing.

The primary cause of their woes is long-term structural weaknesses in economic policy and management, a situation compounded in many resource-rich countries by an inability to use windfalls for development — or a reluctance to do so. This makes them unable to withstand even the smallest of economic shocks.

The emotional debate about resources and investment so beloved by politicians usually centres on the need for Africans to own Africa’s resources. Yet, despite the noble rhetoric, “the people” hardly get a look in even where resource wealth is captured.

In most countries, the state insists on having a stake in mining enterprises and oil exploration and production through joint ventures with operators. In some cases, a majority stake for the state is mandatory.

So what happens to all that money? Mostly, it seems to disappear down any number of black holes, including bloated personal bank accounts, recurrent funding gaps, official pet projects, debt payments and innumerable other unproductive pursuits. Party coffers are a favourite, especially as in many countries, including ours, the line between party and state is distinctly blurred.

State officials in countries such as Angola, Africa’s biggest oil producer, bemoaned the fact that severe budget cuts on the back of sharply reduced growth last year would curtail their plans to address poverty . Such statements are sheer political expedience.

Africa’s resource-rich countries continue to sit at the bottom of human development indicators, with little by way of social investment during the boom times preceding the crisis.

In any case, poverty reduction is usually left to the donors and nongovernmental organisations to sort out.

It may be convenient for African politicians that the global crisis was not of Africa’s making. But that does not remove the fact that the severe contraction of western economies served not just to highlight how badly prepared countries are for external shocks, it showed how little of Africa’s wealth is being harvested for and invested in the continent’s future.

OFFICIAL discussions about how to manage traffic and people through Africa’s busiest border post — Beitbridge — have been going on for at least a decade. And yet, every major holiday begets horror stories about the experience of trying to move through this border crossing. This past Christmas season was no exception. In fact, with the mass flight of Zimbabweans to SA, the situation has become worse.

Delays of several hours for holiday- makers were commonplace. Cars queued for kilometres from the immigration buildings on either side of the border, touts milled through the crowds soliciting bribes, and the sun beat down on the crowds in one of the hottest places in the region.

In the months leading up to the festive season, officials said plans were being made to avoid the usual problems experienced at this vital border crossing. To no avail, it seems.

Not only is Beitbridge a key link between Zimbabwe and SA, it is also a vital cog in the transport network across southern Africa. Yet trucks can spend up to five days trying to get cleared, at great cost to transporters.

SA’s Department of Home Affairs estimates that about 10000 people use the border a day during normal times, with this rising to 18000 over the holidays. Officials at the border post estimated that 3500 vehicles were passing through the post on an average day over the Christmas period.

Surely the experts could solve the problem relatively easily if they put their minds to it? One problem identified in the recent melee was a lack of parking space in the South African yard, which can accommodate only 80 heavy vehicles, 10 buses and 100 cars. Vehicles in Zimbabwe, cleared to go through, were unable to cross into SA until space became available there for them to park. This is not a new problem, so why have the parking facilities not been expanded?

Trucks also clog up the border post as drivers have to process piles of clearing documents and deal with myriad government agencies . These processes need to rationalised. Government task teams have apparently been established to facilitate this process. But history shows us that bureaucrats generally find it a lot easier to increase bureaucracy than reduce it.

The original bridge across the Zambezi River at Beitbridge remains closed, forcing all traffic on to the newer tolled bridge. The New Limpopo Bridge Company, concessionaire for the new bridge, claims that reopening the old one would not reduce congestion. But in reality this resource remains closed because the company cannot toll users — the Beit Trust, which paid for the bridge to be built in 1929, does not allow users to be charged, in perpetuity.

The mooted longer-term solution to the problem is the creation of a one- stop border post. A pilot one-stop border post was opened at Chirundu, between Zimbabwe and Zambia, before Christmas. Passenger traffic is reportedly moving well through the new one-stop post, though authorities are still ironing out freight problems.

There seems to be little point in speeding up vehicle and freight clearance at Chirundu without smoothing operations at Beitbridge, given that about half of traffic through one goes through the other. A second one-stop border post is scheduled for Ressano Garcia, between SA and Mozambique. However, this project has got bogged down in the planning stages.

Overambitious design features of the new five-storey customs and immigration building mean the project cost has leapt from about R600m, which SA had agreed to pay, to nearly R2bn. Bridging finance will have to found before the project can go ahead.

Sources claim Zimbabwe is eager to have the one-stop border post at Beitbridge but the project is being held up by SA, which is not keen on relinquishing the kind of control that is required by the one-stop model.

Unless sufficient political will is mustered to fast-track solutions to the problems at the border crossing, I would wager that holidaymakers at Christmas this year may be facing more nightmares trying to negotiate their way across this hot hellhole.

There must be simple solutions that are within the power of politicians to implement . Another decade of discussions is not an option.

SABMILLER ’s two main competitors in Nigeria, Guinness and Heineken, make nearly as much in that market as SA’s brewing giant makes in 24 other African countries, excluding SA.

This startling fact was disclosed by an SABMiller Africa executive at a recent SA-Nigeria Chamber of Commerce event. He maintains that for all the challenges of the Nigerian market, if companies do not have a Nigeria strategy, they do not really have an Africa strategy.

SABMiller entered the highly competitive Nigerian beer market last year with the purchase of a small brewery in Rivers State in the Niger Delta. The executive said if the company had to do it again it would enter Nigeria sooner. The CEs of South African companies still pondering if a Nigeria strategy is a good idea may want to digest this.

SA and Nigeria recently marked 10 years of the SA-Nigeria Binational Commission (BNC). There is much to celebrate, including the fact that in the past decade, many of SA’s biggest firms have moved into Africa’s biggest market. They include Shoprite , Rand Merchant Bank , Old Mutual , Sanlam , Liberty Life, Sasol , MultiChoice, Standard Bank , Dimension Data and , of course, MTN. Two-way trade has risen from R1,7bn in 1999 to R22,8bn last year.

Undoubtedly, the BNC has been a positive force. Many agreements and protocols have been signed — 22 out of the 33 under discussion, according to Nigerian Vice-President Jonathan Goodluck’s speech at the BNC meeting in Abuja last week.

It is a pity then that 10 years after this important relationship was formalised, it is still dogged by problems.

The issue of visas raised its ugly head at the 10th anniversary celebrations in Abuja, taking the gloss off the occasion. The South African presence at a business forum attached to the BNC meeting was reduced by the difficulty of getting visas as a result of a stricter visa regime recently introduced by the Nigerian government.

The formerly smooth visa procedure has become cumbersome. It now takes several weeks to process a visa, from one week previously and a refundable deposit of R6000 has been introduced for first-time visitors.

It seems the new regulations are in response to the difficulties Nigerians have experienced over the years in obtaining South African visas. The stories are legion about the conditions applicants have to endure during long waits for visa interviews, the weeks it can take for visas to be issued and the repatriation fees for would-be visitors.

The South African missions in Nigeria are vastly understaffed. Their size of the missions has hardly changed in a decade despite a big increase in trade and overall movement of people between the countries.

The BNC recently negotiated a near doubling of flights between Johannesburg and Lagos but seems not have addressed the rising demand for visas that such increased traffic implies.

The issue is thorny as any country wants to regulate the flow of people across its borders. But Nigerians say the people most affected are those with legitimate business interests in SA.

There are other issues such as nationalistic perception problems on both sides, which refuse to go away despite rapidly increasing contact between people from the countries.

Both vice-presidents raised the matter of the trade imbalance between the nations at last week’s BNC meeting. SA’s Kgalema Motlanthe said trade was in Nigeria’s favour (SA imported oil worth R15bn last year while SA exports were just under R8bn), while Goodluck said the trade balance was in SA’s favour — which it is if you strip oil out of the equation. Nigerian business people complain about discrimination and exclusion in SA. But there are many market-related reasons for this imbalance as well. The issue is complex.

Overall, there is great potential mutual benefit in this relationship, which the politicians seemingly recognise. It is a pity then that only two South African ministers were seen at the Abuja business jamboree — and one a deputy minister at that.

The weakness of the BNC, though, is perhaps that after 10 years of rhetoric, backslapping and photo opportunities, people on the ground are still arguing about visas. The lack of consultation with business and other stakeholders in the relationship might well be the cause of the politicians being so out of touch.