SA business wary of Boko Haram

2015-01-18 15:00

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Boko Haram is not the villain that will undo Nigeria’s economic Cinderella story, say South African companies doing business in the continent’s largest economy.

That doesn’t mean that they aren’t taking the militant group that’s laying waste to the country’s northern region seriously.

Nigeria’s Businessday newspaper recently reported that the business community in the country’s north has asked the government to deploy more soldiers to protect companies, their employees and investments.

“The activities of Boko Haram continue to be of great concern to the government and people of Nigeria,” said Henry Egbiki, the managing partner for business services firm EY in the west African country.

“However, terrorism has become a global issue and the activities of Boko Haram should be seen in that light. It is not just a Nigerian issue, it is a global issue,” Egbiki said.

“The Nigerian government has been making concerted efforts to curb the menace, even though expected results are slow. Terrorism is a global issue and Nigeria needs the support of the international community to fight and overcome the Boko Haram threat.”

He and EY remain upbeat, though.

“The country’s growth potential and demographics are huge and will continue to make it attractive for investments. The positives appear to outweigh the negatives at this point.”

Those positives include an economy with an income of about $521?billion (R6?trillion), and telecommunications giant MTN is among those tucking into the Nigerian pie.

MTN has 58?million subscribers in Nigeria, far surpassing its 26?million here in South Africa.

MTN’s corporate affairs group executive Chris Maroleng said: “When we talk about security challenges, our concern will always be primarily for the safety and welfare of our staff and their families and the fellow citizens in the markets in which we operate, which is no different from Nigeria.

“Certainly, we are concerned about the violence that we have particularly seen up north as a result of activities of Boko Haram, so yes we remain concerned about the challenges that face security in Nigeria.”

The company has been in the Nigerian market for more than a decade, so MTN is no stranger to terrorist threats.

Nigerian militant group Movement for the Emancipation of the Niger Delta has bombed MTN facilities and has vowed to attack the mobile network’s infrastructure because of the arrest of its leader, Henry Okah, in South Africa.

Okah made headlines in October 2010 when he was arrested for allegedly engaging in terrorist activities. He was allegedly responsible for masterminding two car bombings in Abuja that killed 12 people, and sentencing is pending.

Maroleng said: “The problem with asymmetrical threats like terrorism is that it is always very difficult for government to react as swiftly and, more importantly, as decisively as we’d all like.”

But neither company believes Boko Haram’s latest insurgency – including an attack on the village of Baga that eyewitnesses and local authorities reckon left up to 2?000 people dead – is a reason for investors to start getting jittery.

“Investors who decide to pull out will be doing so at their own peril as they will be returning soon at a much higher cost,” said Egbiki.

Maroleng said: “I think it would be different if we were talking about something that affected the majority of Nigeria as opposed to a few states up north.

“[But I also] think it depends on the type of investment or business you have in Nigeria.”

Retail giant Shoprite set up a store in northern Nigeria last year, but would not comment on what was going on in that region and would not say if the store had been affected.

“Shoprite is unfortunately not able to respond to your questions at this time. The company is in a closed period until the announcement of its midyear financial results in February,” said Shoprite spokesperson Sarita van Wyk.

Boko Haram’s devastating rise may not collapse the Nigerian economy, but it could possibly pull insignificant percentages from it.

In July last year, Nigeria’s Finance Minister Ngozi Okonjo-Iweala admitted that Boko Haram had negatively affected business and economic activities and reduced the country’s economic forecast by 0.5%.

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