Next Africa: The high cost of being friends with Russia
A price has been put on South Africa’s decision to anger its biggest trading partners by courting Russia as it wages war against Ukraine.
A plunging currency, rising bond yields and the threat of its exports losing duty-free access to the world’s biggest economy.
The impact was evident soon after US Ambassador to South Africa, Reuben Brigety, said a sanctioned Russian ship loaded up arms at a South African naval base in December. That is “unacceptable” and puts South Africa’s participation in the US’s African Growth and Opportunity Act at risk, he said. The rand fell to a record.
President Cyril Ramaphosa didn’t deny Brigety’s allegation, but instead turned to the government’s go-to response when faced with a difficult matter — an independent enquiry to be led by a retired judge. The presidency called Brigety’s comments ‘’disappointing.’’
The spat has been a long time coming. South Africa has for more than a year been raising the ire of the US and its partners by refusing to condemn the invasion of Ukraine, holding naval exercises with Russia and letting sanctioned ships and planes dock and land on its territory.
South Africa’s ruling party has liberation-era ties to the former Soviet Union and prizes its membership of BRICS, a five-nation political bloc that includes Russia and China. But European and US companies are the biggest foreign investors in South Africa.
The confrontation with the US couldn’t come at a worse time. Chronic power cuts are deterring investment and angering citizens, public services are crumbling and marquee mining company, AngloGold, is moving its headquarters to the UK.
Political decisions have economic consequences. South Africa is finding that out the hard way.
