WARREN THOMPSON: Today I have the privilege of interviewing Nigel Casey, he’s the British High Commissioner to South Africa, he’s just recently been appointed. It’s great to join you here in Pretoria, Nigel.
NIGEL CASEY: Thank you very much it’s good to be with you.
WARREN THOMPSON: As I understand it, we were just talking a little bit before the recording about how you’ve served in South Africa before on behalf of your government in the ‘90s. You’ve come back and you’ve been here a couple of months, I’d be very interested just to start off with your perspective of the country during the ‘90s, when you first arrived, and now returning on your second visit, how it has changed and how you see it differently as an outsider?
NIGEL CASEY: In some obvious respects it’s a very changed country and almost a different country to the one I arrived in, in June 1993. The most obvious is that the public face of South Africa has changed completely from everything from the guy who checks your passport on the way in through to the president. I know people are frustrated with the pace of change, particularly in the economy, but we are dealing, as a government, with a completely different government in South Africa and the South Africa that projects itself internationally is completely different now and that’s obviously a welcome change and one that makes all the difference in terms of international perceptions of South Africa. In other respects, South Africa is still the same place that I remember and it’s still the same fabulous country that I was keen to come back to.
WARREN THOMPSON: I think, if I remember correctly, June 1993 was probably the most precarious and vulnerable that the country has ever been during the assassination of Chris Hani, it must have been a baptism of fire for you at that time?
NIGEL CASEY: Literally my first day in South Africa was the day that the AWB drove that armoured personnel carrier through the front window in Kempton Park and, yes, it did feel precarious, it was not long after Chris Hani’s assassination and there was a threat of a bombing campaign. Beyond that, in the run-up to the 1994 elections, Inkatha was boycotting until three weeks before. If you look behind you on the wall you will see my copy of the ballot paper with the little sticker at the bottom where they added Inkatha after the papers had been printed when they decided to come in finally at the last minute. So, yes, it did feel very precarious and very hard won. The point for me when people ask now so what do you think of South Africa’s progress, are you concerned about things, I always think back to how precarious it was in 1993 and how much worse things might have turned out.
The lesson I take is that South Africans are very resilient; they’ve come through much bigger challenges before now and emerged stronger on the other side. So that’s why I say to people that I start out as a strategic optimist when it comes to the future of this country.
WARREN THOMPSON: Obviously your starting position is you’re the diplomatic envoy of the British government to the country, but the countries have a long history together and one of those key ties that I wanted to talk to you about today was trade. Can you give us a bit of perspective as to how trade between the two countries has grown and developed over the last few years?
NIGEL CASEY: For me the really striking thing about the economic relationship between South Africa and the UK, well, two things really, first is its balance and secondly its mutuality. So what do I mean by that, first of all the trade stats are literally in balance, we have about a £10 billion worth of trade every year, which is pretty much £5 billion each way.
But also the investment relationship has become very two-ways, so it’s well known that we’ve had a long-standing stock of investment in South Africa, the Reserve Bank figures suggest that it’s about 36% of all FDI in South Africa, about £45 billion worth. What’s changed in the last 15 to 20 years is that South Africa is also deeply invested in the UK, so we think that South Africans have invested about £65 billion in the UK, in particular buying up some of our biggest high street brands, Nando’s, Bensons for Beds and New Look, these are some of our best loved high street brands. So it’s a two-way street and we’re also buying quality products from South Africa, added-value products, we’re buying BMW 3 Series and Ford Rangers.
Current trade policies between UK and SA
WARREN THOMPSON: So just to frame that at the moment, the trade between the two countries, how do the tariffs and protection fare, how easy is it for a British company to deliver an imported good to South Africa and vice versa how easy is it for South African manufacturers to land products in Britain at the moment in terms of trade tariff and any other export levies that might be incurred?
NIGEL CASEY: I think it’s a pretty good framework at the moment, the formal government-to-government agreement that’s in place at the moment is the EU-SADC Economic Partnership Agreement, which came into force in October 2016 after seven or so years of negotiation. That covers goods trade and it’s an asymmetric agreement in that all the other Southern African countries in it, apart from South Africa, benefit from duty-free, quota-free access to because they are all least developed countries. South Africa is not a least developed country but it does benefit under that agreement from what are called tariff rate quotas, in other words, generous quotes that attract a lower tariff than would otherwise be the case if we were just working on a normal WTO basis. From my experience exporters in both directions are operating from a pretty healthy starting position, the tariffs themselves are not the main barrier to doing business. We have a pretty compatible set of regulatory regimes and so it’s a strong starting point for a healthy two-way trade and investment relationship.
WARREN THOMPSON: Have you had the opportunity to canvas British firms on their appetite to sustain investment in South Africa and, I guess, the broader SADC region if we were to go that far?
NIGEL CASEY: I have, I have spoken to quite a lot of British firms before coming here and since they are here for the long term, the vast majority of our investors have been here for some time already and they take a long-term view. So they’ve seen the business cycle going up and down but South Africa itself is a significant size market and, more importantly, it’s s springboard for entry into the rest of Africa, there is strong growth in other parts of Africa, notably in East Africa. This country, particularly Johannesburg, is the best business services platform anywhere on the continent for people to headquarter themselves for doing business elsewhere. So I think whether you are talking about companies looking at South Africa specifically or Africa as a whole this is definitely the first place people look when they’re looking for a gateway into the market.
WARREN THOMPSON: Just from your perspective and in your experience, we’re desperate to try and sustain foreign direct investment and I’m sure you’re familiar with the figures in terms of unemployment and the number of people on social welfare in this country, is there anything that you think the country could do better to either market itself or remove impediments to allow companies, perhaps not just British companies, but European companies and American companies to come and invest and do business in South Africa?
NIGEL CASEY: I think for companies looking to invest or sell they are looking for a couple of things, they are looking for policy certainty and that’s important if you are investing particularly in an industry like mining, for example, where you are obliged to sink in significant investment and you only get returns over a very long period. They’re also looking for growth and obviously, they will go where the growth is. South Africa is going through a period of low growth at the moment but, as I said, it is still able to attract people as a springboard into other faster-growing parts of the continent and hopefully, this economy will return to growth before long.
How will Brexit impact SA business?
WARREN THOMPSON: I want to get some of your impressions on Brexit, you indicated that you worked with the previous Prime Minister, David Cameron, on the negotiations that led up to the election on Brexit. Can you share some perspective for South African businessmen or South African companies as to what Brexit actually means for the UK, what’s it going to mean in terms of access to the common market and for the country’s immigration policies – where I think it’s been a very open border for European citizens to come and work and live in the UK – what are the scenarios you could sketch out for us?
NIGEL CASEY: The first thing to say is the precise contours of what the eventual Brexit outcome will consist of won’t be known until the negotiations are finished. But we have an overarching vision, which government ministers have been very clear about: at the end of the process we want to have achieved two things, first of all, a very strong, deep relationship with our neighbours in Europe, with the greatest possible access to the European single market and minimal barriers to the smooth flow of goods across borders between the UK and the rest of Europe. The second part is that we want to be very much an outward facing, ambitious trading nation and I’m confident that we will be reinvesting in the years to come in our relationships with longer-standing partners beyond the EU, in particular countries like South Africa where we already have an established and strong economic relationship. I think Brexit will give us that extra push that we needed to be more present in markets like this, both in a political and economic sense and, as I say, to reinvest and reinvigorate our traditional long-standing relationships.
WARREN THOMPSON: So that means we’re going to see a little bit more of the UK being a bit more present with us and Africa?
NIGEL CASEY: Absolutely, I’m confident about that and specifically when it comes to South Africa. Our first task is to make sure that there is no disruption to our existing trade and, as I mentioned earlier, we have the existing EU-SADC Economic Partnership Agreement, the first priority is to make sure that there’s no interruption in the trade that’s enabled by that current agreement. So that’s task number one and we will be working with the South African government, which shares our ambition to make sure that we deal with that issue promptly in the next couple of years before we leave the EU. Once we’ve left the EU and have control of our own trade policy we will be ready to have a more ambitious forward-looking discussion about new opportunities that open up in the future where, as I say, we have the ability to set our own independent trade policy with an eye to what works best for the UK and South Africa.
WARREN THOMPSON: If we had to summarise that I think the objective from the British side of things would be almost to keep the economic relationship with the EU the same but obviously by leaving the European Union the UK is going to assert its rights to who it lets into its borders effectively, being a little bit more careful and perhaps better regulating the flow of people in and out of the UK, as opposed to economic goods and services.
NIGEL CASEY: First of all our economic relationship with the EU is clearly not going to be exactly as it was before since we are leaving the EU proper but, as I say, we will work for the closest economic partnership through the negotiations, which have started in the last couple of weeks. I’m confident that we are going to remain an open country, we’re not going to be drawing up the drawbridge to talent from all around the world. Indeed, we want to make sure that we structure our approach to migration in a way which attracts the top talent, whether that’s from South Africa or anywhere else that enables a two-way flow of talent commensurate with the type of strong business relationship that we aim to build.
WARREN THOMPSON: Great, we’ll have to leave it there. Thank you for your time, Nigel, and all the best in your role.
NIGEL CASEY: Thank you very much.
WARREN THOMPSON: That was Nigel Casey, the British High Commissioner to South Africa.
Follow Nigel Casey on twitter @NigelCaseyHC
Oops! We could not locate your form.