The growing strength of political democracy and a liberalising economy in Nigeria has created substantial opportunities for South African businesses in that country – but economic partnership with Nigerian business, rather than domination by South African companies, is the only model that will offer sustainable benefit to both parties.
Anthony Swart, CEO of global brand design consultancy Enterprise IG, says his company's experience in Nigeria has taught him that the huge potential to grow business between Nigeria and South Africa will not amount to much if it is not done in an equitable way.
"SA business must not make the mistake of effectively trying to economically colonise Nigeria rather than developing partnerships. In effect, developing sustainable partnerships involves initiating skills transfer programmes and seeking to grow mutually beneficial relationships. It also involves Nigerian businesses building a presence in SA, which is happening more and more".
A lack of skills in certain areas can be challenging when you need to translate a strategy or creative concept into physical reality – as Swart has found in executing work for Enterprise IG's clients in Nigeria, which include Oando, Sahara Energy and Conoil, all petroleum businesses being privatised, Globacom, a telecoms company, First Bank, Nigeria's oldest and largest bank as well as FSB International Bank, Guaranty Trust Bank and Veitva Capital Management.
"But we are finding innovative ways around the challenges, where we may use SA skills to start projects, but skills transfer programmes are in inherent part of the project and Nigerian businesses are now increasingly involved in the implementation of our work".
Swart says economic confidence is growing within Nigeria, and this momentum is being fuelled by interest from external parties encouraged by what they see and experience. But Swart cautions that infrastructure – particularly transport – remains poor, and is compounded by an erratic electricity supply. Furthermore, in many sectors there is a limited enabling environment.
While these issues cause operational challenges, Swart says Nigeria's income from oil puts it in an enviable position relative to many of its African peers: it has capital to fund growth and development. And it's not just the large South African corporate players who are making headway in Nigeria, challenging the long established commercial and social links that have existed with the United Kingdom, Europe and the United States.
SA is seen as an alternative business partner in a growing number of areas, and SA businesses, both large and small, offer many distinct advantages, says Swart.
The quality coming out of SA is typically first world, but "South Africans understand the art of combining first and third world realities better. We have the ability to offer a global standard of service and delivery that is contextualized locally and has local relevance."
In Enterprise IG's case, it's stating the obvious to say brand building must recognise local norms and values. The real challenges, says Swart, are much deeper. "It's not just about bridging cultural divides. It's about coming to terms with commercial environments that are unique in the way they operate", he says.
Importantly, channels to market need to be properly understood. In many parts of Africa, western style shopping malls and city high streets are not the norm. Informal markets predominate, particularly the further away you travel from urban centres. Understanding how goods are sold is crucially important to branding decisions. Where there are no shops there is no shelving and goods are transported and displayed in a variety of ways. Breaking through the clutter has different sorts of challenges.
"It is impossible to succeed in Nigeria or any other country with a preconceived mindset or a structured way of conducting business. You need to immerse yourselves in the spirit of the people, the culture, the climate, the logistics, the demographics and the idiosyncrasies of local business."
The benefits of being African go beyond context and understanding, though. Swart says the spirit of an African Renaissance is strong in both Nigeria and South Africa, and there is a sense that Africans doing business with Africans helps keep the benefits inside the continent. The fact that Nigerian president Olusegun Obasanjo and SA president Thabo Mbeki are the principal visionaries behind the New Partnership for Africa's Development (NEPAD) provides a broader philosophical dimension to trade between the two countries, a factor Swart believes will help ensure an increasingly successful partnership going forward.