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 was a market for value-added goods, Sacci chief executive Neren Rau said.

“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, Rau said.

On Sunday, Nigeria became Africa’s biggest economy after its statistics office announced the results of a rebasing of its gross domestic product.

On Monday, the National Treasury welcomed the announcement, but pointed out that South Africa’s government and private sector continued to play a role in the growth and development of Africa.

Rau said business needed to be offered incentives by the government to positively affect investor confidence locally. “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. Examples include the [Promotion and Protection of] Investment Bill, Private Security Industry Amendment Bill and mining legislation.”

To improve investor confidence, the 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 processes for each policy proposal”. – Sapa