The country’s refusal to condemn Moscow over the Ukraine conflict may cost it 10% of export revenue
South Africa’s neutral stance on the Russia-Ukraine conflict could cost the country a significant chunk of its gross domestic product if the US and the EU decide to punish Pretoria, Bloomberg reported on Friday, citing a Johannesburg-based partner of American banking and services giant JPMorgan.
South Africa could lose as much as $32.4 billion in export revenue, or almost 10% of its GDP, should the West decide to take action, Bloomberg reported, citing a note from Ndivhuho Netshitenzhe, an economist at Stanlib Asset Management.
Western nations have sought to penalise countries that trade with Russia and enable it to circumvent sanctions. The EU is currently discussing the 11th package of sanctions that would target third countries. However, according to media reports, the bloc’s ambassadors have so far failed to agree on any measures.
South Africa’s largest trading partner is China, followed by the US and Germany. The EU and US account for 30.4% of South Africa’s total exports, according to Bloomberg, while Russia’s share stands at a mere 0.23%. Moscow mainly buys manganese ore, citrus, and cars from Pretoria, while the US and Germany buy platinum, cars, and gold.
Pretoria has repeatedly insisted that it is neutral in the conflict between Moscow and Kiev. The African nation is also a member of the BRICS alliance of developing economies, which include Brazil, Russia, India, and China.
South Africa is hosting this year’s BRICS summit in August, set to be attended by the leaders of all member states. Pretoria has said it will not enforce the International Criminal Court’s warrant for the arrest of Russian President Vladimir Putin, which was issued in March.
BRICS has already overtaken the G7 (the group of seven industrialized nations, comprising Canada, France, Germany, Italy, Japan, Britain, and the US) in terms of economic growth, and accounts for over 30% of global GDP. BRICS member states have been pushing for de-dollarization in light of Western economic sanctions targeting Russia that have seen billions of dollars’ worth of Moscow’s assets frozen abroad. A growing number of countries, among them Saudi Arabia, Indonesia, the United Arab Emirates, and Thailand, are considering joining BRICS.