South African government is looking at Nigeria’s oil fields as some of the options it may turn to for the supply of its crude oil imports in the near future.
This is one of the reasons South Africa is frantic to strengthen the existing bilateral trade and economic relations with Nigeria in the face of growing uncertainties in the international oil market heightened by the economic and political crises playing out in America, Asia, Middle East and the Euro zone in recent times.
The South African High Commissioner in Nigeria, Kingsley Mamabolo, said importing oil from Nigeria was among other issues discussed at the Bi-National Commission meeting in South Africa earlier this month, adding that if a deal is struck, crude oil exports to his country would boost the volume of trade between the two countries in the years ahead.
Mr. Mamabolo, who gave the hint in Abuja during the opening of the multi-billion Naira Grand Towers Mall on Wednesday in Abuja, said the deal may well be to the benefit of Nigeria, which is currently exploring prospects of growing its oil production capacity from the current 2.6million barrels per day to about 4milion barrels.
Though he did give much detail about the volume of oil South Africa plans to be sourcing from Nigeria, the envoy assured that it would be huge.
“Now that is going to make a huge difference it terms of the volume of trades between the two countries, because as you know, Iran and many other countries are probably going to be under sanctions and so on,” he said.
“And so Nigeria will be our focus in terms of where to get oil and all that, and that is going to increase our bilateral trade volume. But I cannot for now say by what magnitude, but I can tell you is going to be huge if we begin to focus on buying oil from Nigeria and so on, it will be huge.”
The High Commissioner, who put the volume of trade between the two countries at the moment at about $3billion annually, noted that complaints about lopsided bilateral trade relations between Nigeria and South Africa had to do with the level of development in the two economies and not any policy framework to restrict trade.
“South African investment in Nigeria has been increasing,” he said. “I know that the volume of trade has grown from the region of $1 billion in 1998 to about $3 billion now. We are moving and we have got a lot of investments in Nigeria. For instance, there are investments by MTN, Multichoice and many others, and in Nigeria, you have the Dangote going to South Africa and so on.
“Of course, there has always been the complaint that the trade appears lopsided. Some people say there are more South African companies coming to Nigeria than the other way round, and of course, governments have been trying to see how to address that. You can never find equity. The reason for this is because our economies are not the same.
“The South African economy is much more diversified. There is much more that one can buy from South Africa than what we are buying from Nigeria, because unfortunately Nigeria in the past has focused much on oil than other sectors. One of the ways to address the problem of lopsidedness in our trade is through the Bi-National Commission, which Nigeria’s Vice President, Namadi Sambo, was recently in South Africa to discuss.”
According to Mr. Mamabolo, the Bi-National Commission, which held last June gave a good indication that both countries realised what was happening in the past, and the need for each other to cooperate. He added that the focus should be on how to consolidate on the existing cordial relations to the nations’ and continental political, social, economic and cultural benefits.
“We will try to improve on the bilateral trade volume in the years ahead, but it is not good to base the volume on mere speculation. But there is a great potential here. For example, there is one announcement that was made during the Bi-National Commission forum that South Africa must begin to look towards Nigeria for its oil and crude oil,” Mr. Mamabolo stated.