Nigeria, South Africa Bi-Lateral Agreement Forbids Nationalisation Of Assets

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The South African Acting High Commissioner to Nigeria, Amb. Bobby Moroe, told journalists on Sunday in Abuja the capital city of Nigeria that his country remained committed to strengthening bilateral ties with Nigeria.

Moroe said the relationship between Nigeria and South Africa would remain strong and on course.

The envoy noted that President Muhammadu Buhari and his South African counterpart, Cyril Ramaphosa, were expected to meet in October to discuss modalities to address attacks on Nigerians living in that country.

Meanwhile, in a statement by Khusela Diko, spokesperson to the President, the South African Government said President Buhari’s state visit would reinforce the bond between both countries.

Diko stated that the visit, next month, would further strengthen their bond and jointly develop responses to challenges affecting people and businesses in South Africa and Nigeria.

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According to him, President Cyril Ramaphosa held discussions, on Sept. 6, with Nigeria’s Special Envoy, Amb. Ahmed Abubakar, on violence in South Africa and developments in Nigeria around South African businesses.

“The visit to Pretoria by the Special Envoy followed a recent meeting between Presidents Ramaphosa and Buhari in Yokohama, Japan, on sidelines of the Tokyo International Conference on African Development.

“In their discussion, the Special Envoy conveyed President Buhari’s concern at recent events in South Africa, in the context of the strong and cordial relations that characterise the interaction between the two countries.

“President Buhari conveyed his commitment to the values of prosperity and the advancement of Africa that are shared by South Africa and Nigeria.

“Nigeria stands ready to assist South Africa in establishing the root causes of and developing sustainable solutions to the challenges concerned.

“President Buhari has undertaken that where challenges emerge in Nigeria, the Nigerian government will act against lawlessness and the targeting of South African assets in Nigeria,” Diko stated.

Bi-lateral trade clause forbids nationalization of assets

Meanwhile, it was gathered that Nigeria stands to incur a huge cost if it decides to nationalise South African businesses in Nigeria in retaliation against xenophobic attacks on its citizens living in South Africa.

This is because there is a clause in the trade agreement between both countries that clearly forbids such action.

An investigation by THISDAY NEWSPAPER revealed that Nigeria and South Africa signed a “Reciprocal Promotion and Protection of Investments” deal on April 1, 2000.

The agreement effectively forbids the nationalisation of investments by both countries.

This, however, conflicts with recent calls by the ruling All Progressives Congress (APC) on the federal government to take steps to nationalise South African shares in MTN and other businesses with South African content.

The bilateral business agreement makes adequate and generous provisions for the protection of investments made by the citizens of both countries in the respective countries.

Excerpt from the agreement reads: “The Government of the Republic of South Africa and the Government of the Federal Republic of Nigeria (hereinafter referred to as the Parties), desiring to create favourable conditions for greater investment by investors of either Party in the territory of the other Party;

“Recognising that the reciprocal promotion and protection of investments will be conducive to the stimulation of individual business initiative, contribute to the development and increase the prosperity of both Parties;

“Recognising the right of the Parties to define the conditions under which foreign investment can be received and the investor’s duty to respect the host country’s sovereignty and domestic law;

“Determine to increase favourable conditions for greater investment by nationals and companies of a Party in the territory of the other Party.”

A clause in the document provides stringent conditions for limiting the effect of the investment deal.

In the exception clause, Article 6 titled “Expropriation” is quite specific and forbids the nationalisation of the other party’s assets.

It says in the event that one of the parties’ national interest requires that it nationalises the other party’s investments, the agreement provides that this cannot be done with impunity.

Liability will follow. The agreement also makes adequate provisions for enforcement of the provisions through arbitration.

Going by the letter and spirit of the agreement, Nigeria may not escape liability if it nationalises assets belonging to South Africans citizens.

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