Current Affairs Politics South Africa

Foreign relations – is Pretoria playing with fire?

Foreign relations – is Pretoria playing with fire?
  • PublishedMarch 23, 2023

The latest manoeuvres in the relationship dance between the US and South Africa can perhaps best be described as an attempted reset rather than a rapprochement.

US relations with South Africa, which reached a new low over the last year, are poised to get potentially even more tempestuous against a geopolitical background of a brewing scramble for influence over the country by Russia, China and the US.

Not surprisingly, President Joe Biden dispatched his Secretary of the Treasury Janet L. Yellen on a four-day trek through South Africa at the end of January – on the last leg of a three-country African safari which also included Senegal and Zambia.

The occasion was not lost on the host finance minister, Enoch Godongwana, who mischievously reminded her that “the last time that a US Secretary of the Treasury visited South Africa was in 2014!” That was Jacob J. Lew, serving in President Barack Obama’s administration.

Yellen’s mission is as much a manifestation of a new foreign policy objective of re-engaging with Africa in general and reinforcing an erstwhile ‘valued’ partnership with Pretoria, primarily for reasons of economic, financial and security self-interest.

Both sides acknowledge that this partnership has been woefully neglected over the last decade – especially during the Trump administration. US security experts warn that this has also resulted in a misguided ceding to the geopolitical and economic embraces of China and Russia. Who would have thought that foreign economic policy would have assumed a much greater urgency for Washington’s relations with Pretoria, given the host of dangerous trends in Europe, Asia and internally, with the rise of domestic terrorism and anti-democratic movements?

Nevertheless, Secretary of State Anthony Blinken is more preoccupied with the Russian war with Ukraine and NATO’s evolving response, China’s ambitions in East Asia and ongoing tensions in the Middle East.

But don’t be beguiled by American soft power, so eloquently articulated by the genteel charm offensive of Yellen. Behind it is a steely determination to safeguard and enhance US economic and security interests in resource-rich South Africa.

This puts the US in direct competition even against the EU, UK, Japan and India, let alone China and Russia. Yellen’s visit, for instance, coincided with the visit of Jutta Urpilainen, the EU Commissioner for International Partnerships.

More importantly, another visitor to South Africa a day before Yellen’s arrival was Russian Foreign Minister Sergey Lavrov. The timing was a brazen act of defiance endorsed by President Cyril Ramaphosa and his Minister for International Affairs and Cooperation Naledi Pandor, as if to assert Pretoria’s diplomatic ‘independence’.

The US is already seething at Pretoria’s neutrality in refusing to condemn the Russian invasion of Ukraine. To add insult to injury, the South African navy was on schedule to host a 10-day joint naval drill with its Russian and Chinese counterparts from 17 to 27 February, off Durban and Richards Bay.

The fact that the joint maritime exercises coincided with the first anniversary of the Russian invasion of Ukraine and the Russian warships are armed with hypersonic cruise weapons, suggests that the radical anti-west faction of the ANC is dominating the current direction of South African foreign policy.

Some ANC apparatchiks see this as Pretoria merely flexing its ‘Russia and China Card’, but it is a risky strategy which could backfire.

BRICS expansion mooted

South Africa is also the chair of BRICS for 2023. BRICS is a multilateral bloc comprising Brazil, Russia, India, China and South Africa. President Ramaphosa will host the 15th BRICS Summit in Durban in August this year.

On the agenda is the proposed expansion of BRICS as a counter to EU, US and Japanese geopolitical hegemony – a move which is ringing alarm bells in Western capitals.

Saudi Arabia, Turkey and Argentina are keen to join. For Pretoria there is a genuine dichotomy at odds with the country’s democratic constitution in that the bloc seems to be veering towards reinforcing the values of ‘authoritarianism, ultra-nationalism and populism’.

The nadir in US-South African relations is partly self-inflicted and partly coincidental, which has the potential to further blur the lines between American re-engagement and disengagement with Pretoria.

Ramaphosa and the ANC are mired in scandal and allegations of corruption. Whether he is chastened by a failed impeachment motion thanks to the support of his ANC cadres, who also re-elected him as party president in December, only time will tell. But his standing in the democratic world has been seriously affected.

Ramaphosa was conspicuously absent at the 2022 US-Africa Leaders Summit in Washington in mid-December – the most important annual gathering for African leaders at the nexus of global political, economic and security power.

In January, he humiliatingly withdrew from speaking at the World Economic Forum in Davos because he had to deal with an energy crisis at home where Eskom, the electricity utility, had just “placed the country into Stage 6 load shedding until further notice”.

This translates into repeated power cuts in a single day affecting all sectors of society, a reality which is the bane of potential inward foreign investment. Finance Minister Godongwana not surprisingly has effectively been standing in for his President on the international stage.

The elephant in the room against the ANC’s ‘Russian and China Card’ is that the US remains the world’s most powerful economy and investor, while the South African economy is defined by an entrenched energy crisis, stubborn subdued GDP growth, low inward FDI, high inflation and a cost-of-living crisis.

Energy transition funding

To further burnish its credentials, the US, together with the UK and EU, is heavily invested in the International Partners Group (IPG) of developed economies committed to South Africa’s Just Energy Transition Partnership (JETP), aimed at weaning the country away from reliance on coal and promoting new opportunities in renewable energy. The IPG has pledged $8.5bn to JETP, including $1.045bn from US government agencies.

JETP is the flagship engagement of US foreign economic policy in South Africa. US Assistant Secretary for International Trade and Development, Alexia Latortue, speaking at the OECD’s Private Finance for Sustainable Development Conference in February, reiterated that JETP with South Africa is “a novel and promising model of how the United States and other partners are pooling resources and leverage in support of high- emitting developing countries’ energy transitions.

“This aggregation of finance will support countries in making politically difficult reforms that are critical to paving the way for the private sector to invest in renewable energy and energy efficiency at scale.”

Godongwana knows that public budgets alone won’t be able to fill the funding gap of JETP and climate-related infrastructure. While acknowledging the $8.5bn JETP commitment, he strongly reminded Yellen that this was mostly in the form of concessionary loans and other commercial arrangements instead of “a much larger grant-funding component”.

The reality is that public budgets alone won’t be able to fill any emerging market, let alone South Africa’s infrastructure financing gap. “But the amount of private capital investors have mobilised for emerging market infrastructure has been stagnant for over 8 years, never rising above $175bn annually,” admitted Alexia LaTortue.

As President Biden reminded at the US-Africa Summit: “Africa’s economic transition depends on good government, healthy populations, and reliable and affordable energy. These things business seeks out when looking to invest.”

Written By
Mushtak Parker

Mushtak Parker is Editor of Islamic Banker Magazine, one of the foremost journals in the industry with a global circulation in the major Islamic Financial institutions.

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