Johannesburg - A healthy Nigerian economy, now the largest in Africa, could be beneficial for South Africa, The SA Chamber of Commerce and Industry said on Monday.
This was if domestic companies were able to strengthen their business links with Nigeria, as it is a market for value-added goods, chief executive Neren Rau said in a statement.
“This development is also an important signal that South Africa is not the only investment destination in Africa. South Africa will now face stronger competition from Nigeria for foreign investment.”
This meant South Africa would have to review its policies and approach to investor confidence.
On Sunday, Nigeria reportedly became Africa's biggest economy after its government announced a rebasing of its gross domestic product.
On Monday, the finance ministry welcomed the announcement, but pointed out that the South African government and the private sector continued to play a role in the growth and development of Africa.
Rau said business needed to be offered incentives by government to positively affect investor confidence.
“Business must experience a welcoming investment environment. Several current legislative proposals will incur significant increases to the cost of doing business, weaken property rights and create uncertainty,” he said.
“Examples include the Investment Bill (PPIB), Private Security Amendment Bill (PSIRA) and mining legislation.”
To improve investor confidence, government must consult with the business community specifically on the impact legislative proposals might have on investor confidence and the cost of doing business.
“This must then be reflected in mandatory Regulatory Impact Assessment (RIA) processes for each policy proposal,” he said.
“To enhance certainty in the business environment, the motivation for each policy proposal should be linked to the NDP (National Development Plan).” - Sapa