Finance Minister Enoch Godongwana. Photo: Mlungisi Louw/Gallo Images
Finance Minister Enoch Godongwana has underlined the importance of delinking South Africa’s economy from the West.
Speaking on a panel at the World Economic Forum (WEF) meetings in Davos on Thursday, the minister noted that South Africa’s economy has historically been “heavily dependent” on trade with the West.
While China is South Africa’s single biggest trading partner, taken together the United States and Europe are the most significant export destinations for the country.
This year’s WEF meetings take place against the backdrop of heightened geopolitical instability, which has rippled through global supply chains, causing inflation to soar. In this context, a number of countries are looking to diversify their trade to avoid the economic effect of future shocks.
Godongwana was speaking on a panel about the expansion of Brics, which has created an important alliance of 10 emerging market economies.
The bloc’s expansion was finalised earlier this month. The alliance now accounts for 25% of global exports.
“So a delinking, for us, is quite critical. In other words, changing the trading patterns,” the finance minister said.
Godongwana also spoke about the significance of the African Continental Free Trade Area in this regard. The agreement, which has been ratified by 47 countries, aims to remove barriers to intra-African trade.
“Our trading patterns have changed greatly with Africa. Africa now has become our second trading partner for South Africa. That shift in trade is so important for us because it reduces that dependence,” he said.
Other panellists underplayed some of the ideological differences between the Brics members — which, in the wake of global fragmentation, could make achieving consensus difficult.
For example, the Gulf States of Saudi Arabia and the United Arab Emirates (UAE) — which are among the new Brics members — have called for a ceasefire of the US-backed assault on Gaza. But they have also recently sought to normalise relations with Israel.
Meanwhile, South Africa has taken a much firmer stance, taking Israel to the International Court of Justice for allegedly violating the Genocide Convention. A strong ally to Palestine, South Africa has previously called for Israel to be declared an apartheid state.
The UAE’s minister of economy, Abdulla Bin Touq, maintained that Brics is not a political alliance. “And neither are we in a Cold War environment to join or not to join,” he said.
“This is something we need to clear about on this stage here right now … It is opportunities. It is trade. It is economic drivers. It is those that actually allow us to really look at Brics with the Global South agenda of trade and economy.”