Foreign Minister Olugbenga Ashiru said Nigeria would respond to any further action after South Africa on Friday refused entry to Nigerians on suspicions that their yellow fever vaccination cards were fake.
Sales of fake vaccination cards are common at Nigerian borders.
South Africa's ambassador was summoned to the Nigerian foreign ministry on Monday, and 28 South Africans were refused entry into Nigeria the same day in an apparent retaliatory move.
Nigerian airline Arik Air also suspended its Lagos-Johannesburg flight for a day in protest.
Ashiru said that, despite "cordial" relations at the leadership level of the two continental powerhouses, immigration authorities and police in South Africa were "fuelling the irritation between our two countries".
"And what you saw played out last week is exactly what I have in mind - that the officials in the immigration department are always unfriendly towards Nigerian travellers, and I say that boldly," Ashiru, a former ambassador to South Africa, told a committee of lawmakers.
"Also the police, they randomly, without any reason, go on a rampage and arrest Nigerians indiscriminately and lock them up. What you see playing out is what we call xenophobia by South Africans against all Africans - not just Nigerians, including even those from their neighbouring countries."
South Africans have in the past vented their anger on foreigners, mostly Zimbabweans, Mozambicans, Nigerians and Somalis, accusing them of taking their jobs and committing crimes.
Xenophobic attacks in May 2008 left 62 people dead and caused thousands to flee their homes.
Ashiru pledged an "appropriate reaction" to any further such moves to refuse entry to Nigerians and sent a signal to South African companies.
"They should not take the friendly business environment we have in Nigeria, whereby companies including South African companies are making more profit in Nigeria than in South Africa, for granted," he said.
South Africa's embassy in Nigeria declined to comment.
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