Bismarck Rewane ,Chief Executive Officer of Financial Derivates Limited
The Rand Merchant Bank Nigeria (RMBN) and the Nigeria–South Africa Chamber of Commerce (NSACC) at a breakfast assembly in Lagos, explored methods to improve bilateral trade and funding alternatives between Nigeria and South Africa with a attainable swap deal on Naira and South African Rand.
At the occasion held just lately in Lagos, the Managing Director and CEO Financial Derivatives Company Limited, Bismarck Rewane, acknowledged that 1.22 per cent of Nigeria’s import have been from South Africa, whereas four.5 per cent of its exports goes to South Africa, exhibiting a lopsided trade relationship.
As acknowledged by him, Nigeria’s export of minerals to South Africa in 2017, hit an export worth of 99.6 per cent and realised $1.83 billion income, whereas its rubber export was at zero.17 per cent and introduced $three.13 million income for Nigeria.
He maintained that plastics took the lead in South Africa’s exports to Nigeria in 2017, with an export worth of 24.three per cent at $104.four million.
Exports of equipment and mechanical home equipment stood at 9.73 per cent to realise $41.eight million income, whereas edible fruits and nuts stood at 7.66 per cent, with a worth of $32.9 million income.
On the setbacks to Nigeria–South African trade, he cited political atmosphere, border and customs logistics, safety points (xenophobia), tax and authorized constraints and weak establishments as challenges to a wholesome bilateral relation between the 2 international locations.
He famous that as the biggest economies in Sub-Saharan Africa (SSA), accounting for 37 per cent of the Gross Domestic Product (GDP), 59.three per cent of the entire export trade and 58.2 per cent of complete imports of SSA, the NGR and ZAR swap would deepen trade and funding relationship between them.
“The bilateral trade would enhance trade ties and encourage motion of products and companies, ease stress on exterior reserves and improve infrastructural growth and job creation.
“Swap arrangement will enhance trade flows by at least 50 per cent to $4 billion, narrow Nigeria – South Africa trade imbalance to less than $1 billion and companies that play in retail, telecommunications, power and entertainment sector will be key beneficiaries of the arrangement,” he mentioned.
Rewane envisaged that bilateral agreements between the international locations key trade companions would enhance inclusive progress and lead to elevated exterior reserves, cut back change fee volatility, facilitate lending to the actual sector and enhance infrastructural growth and job creation.
“A bilateral settlement might preserve oil value above $80 per barrel, oil manufacturing at 1.8 million barrels per day, trade surplus at $20 billion and the rate of interest atmosphere at a declining path.
“It would lead to easy negotiations between the two countries, benefits would be reaped faster than multilateral agreements, countries can choose trading partners, trade barriers could be reduced or eliminated and stronger economic ties would be built,” he additionally mentioned.