With the current trend of attacks on Nigerians and other foreign nationals and their businesses in South-Africa, a series of reprisal attack reports have been recorded on South-African business outlets and their investments in other African countries.
The attack in South-Africa was reported to be on the foreign nationals; while mixed feelings trail the report that the attack was targeted at people who are involved in illegal activities. Most responses and worries are about the businesses and shops being looted by the South-African mobs; are these people also involved in the illegal business?
Our attention is to look at the impact of the reprisal attacks on businesses in Nigeria with special focus on businesses in Ibadan. It is good to note that the population of Nigeria has positioned it as a good market for other countries including South-Africa. The report on This Daily newspapers dated 6th September 2019 as captured on ‘allafrica.com’ claimed that Mr. Darkey Africa, the Consul-General of South-Africa High Commission has put the trade volume between Nigeria and South-Africa at $60 billion.
Also, that National Bureau of Statistics First Quarter 2019 Foreign Trade Statistics revealed that South Africa is one of Nigeria’s top five export destinations with an estimated export value of N325.5 billion.
The above data imply that it all trickles down to the SMEs. The South-African investments in Nigeria feed the SMEs in the country and provide jobs for hundreds of thousands of Nigerians. Organizations like PEP, Multi-choice, MTN, Shoprite and many more have their offices in Ibadan and outlets in other Oyo State up-towns. They have distributors who are SMEs that get their supply and support from their mother companies. Any attack on the mother company is an attack on SME development in Oyo state.
The multi-choice representative offices that sell and service DSTV and GoTV for customers are owned by Nigerians and employs Nigerians. Any attack on the mother company would mean that the representative would not have supplies and would not make money to feed their families.
Shoprite housed tens of Nigeria SME businesses that sell household goods and provides entertainment and restaurant services. Most agricultural produce is been sold to grocery shops in Shoprite. Attack on Shoprite is a direct attack on Oyo state’s quest for SME development and implicate attack on the economy of the state.
Impact of The Attacks
i. Loss of jobs: Nigerians who have been employed either as entrepreneurs or as employees of these companies would be out of jobs as a result of the attacks.
ii. Increase in prices of goods and services: Because artificial scarcity has been created through the attacks, supply is reduced while demand remains as it was; the prices of the goods and/or services would increase.
iii. Increase in unemployment level: The entrepreneurs and employees that losses their businesses and employment as a result of the attacks on the South-African businesses would have to join the unemployment market, which would then increase the unemployment rate in Oyo State.
iv. Increase in Poverty level: Because there would be an increase in the unemployed indigenes in the state, that would also trigger an increase in poverty level as dependency rate would also increase.
v. Decrease in government revenue: Because the number of businesses in the state has reduced, that would have an impact on the volume and value of tax the state is generating from businesses operating in the state. Withholding Tax and Value Added Tax would reduce drastically. Therefore the government would need to increase the provision for excess budget.
Can we repay evil with evil? At the moment, the South-African economy is ‘going south’ as more and more investors and countries are considering moving out their investment from the country because of the direct target on foreign nationals. We do not want to experience the same thing. Rather, we would protect our economy by not attacking those investments because Nigeria ranked top as an alternative market for investment in Africa.