/ 12 May 2023

Ramaphosa on verge of losing investor confidence after US claims – Standard Bank

African Mining Indaba 2023
President Cyril Ramaphosa. (Photo: David Harrison)

Cooperate South Africa has entered the debate on the US-South Africa relations with Standard Bank saying frustrations around President Cyril Ramaphosa’s perceived pro-Russia approach may reduce private sector willingness to back his reform initiatives.

The bank’s analysts also said there were deepening frustrations in the business and investor community around the president’s indecisiveness in response to the country’s various unfolding crises. 

“These criticisms will almost certainly elevate now, particularly in the context of ongoing and severe load-shedding, and the president’s predictable call for an inquiry, led by a retired judge, to interrogate the ambassador’s claims,” they said.

Ramaphosa has established an inquiry into claims by the US ambassador to South Africa, Reuben Brigety, that the country is supplying arms and ammunition to Russia.

Brigety said Washington was “confident” that weapons and ammunition were loaded onto  the US sanctioned Russian cargo vessel known as Lady R, when docked at the Simon’s Town naval base between 6 and 8 December last year. 

He said that arming the Russians was “extremely serious”, that the issue was not resolved, and that South Africa should put into practice its stated non-aligned position.

Brigety said the US recognised South Africa’s right to diplomatic relations, but  Washington’s concern was with regard to actions that deviated from non-alignment, particularly in areas of conflict.

Standard Bank told its investors in its Weekly Talking Points report that it expected the tenor of high-level South Africa-US diplomatic engagements to be actively moderated by both sides in the coming days and weeks. 

This would also be encouraged by international relations and cooperation minister Naledi Pandor’s engagement with US secretary of state Anthony Blinken on Friday afternoon. 

“However, the ANC will almost certainly be more assertive in its criticism of the approach taken by the ambassador, which could deepen concerns in the US around SA’s capacity to temper its Russia stance,” the bank said.

“Looking longer-term, the outcome of next year’s US elections will be important. If the Republicans, who are known to be less tolerant of SA’s clumsy ‘neutrality’, win the presidency, and particularly if led by Donald Trump, there are undeniably risks of tensions — and US-imposed economic consequences — intensifying.” 

Standard Bank’s analysis on the ANC and Ramaphosa came as the governing party’s treasurer general Gwen Ramokgopa told the Mail & Guardian that Brigety was fueling mistrust and straining diplomatic relations. 

But Brigety said he could not foresee “under any circumstances the United States downgrading or decreasing its political engagement” with the government of South Africa. 

He said Washington was clear in expressing the seriousness of its concerns to Pretoria.

The tensions are playing out as South Africa grapples with Russian President Vladimir Putin’s pending attendance at the Brics summit in Durban in August, despite a warrant for his arrest being issued by the International Criminal Court. South Africa is a full member of the court and is obliged to arrest Putin for alleged war crimes. 

Brigety said Washington could not understand why the government would not “publicly commit” to the obligation it has under the Rome Statute.

Standard Bank said the US government would likely look to use other economic or developmental pressure points to pull South Africa back towards the kind of neutrality expressed by other influential countries such as fellow Brics members Brazil and India. 

Last year, around $3 billion worth of South African exports benefitted from the country’s preferential access to the US under the African Growth and Opportunities Act (Agoa).

“We believe that the ambassador’s public comments are designed principally to provide the US with leverage in ongoing negotiations with SA around its stance on the Russia-Ukraine war, and specifically to emphasise that Pretoria is not, as it regularly claims, acting in a way that aligns with its claimed ‘neutrality’,” Standard Bank said.

“Seen in this way, the US is looking to use the public and market pressure elicited by the ambassador’s statements to try to impel the South African government to pull back to a genuinely neutral stance, which would imply a reduction in the regularity and openness of its recent engagements with Moscow.”