Trading lives for loyalties: Our economy will pay for ANC’s Russian alignment

Issued by Dr Dion George MP – DA Shadow Minister of Finance
12 May 2023 in News

Please find attached a soundbite by Dr Dion George MP.

“South Africa households are already battling a government induced cost of living crisis and destroying our economic relationship with the US will make that crisis look like a picnic.” – Dr Dion George MP

Yesterday, the United States Ambassador revealed how the ANC has recklessly pulled the pin on a geopolitical grenade. By supplying weapons and ammunition to Russia, the ANC is threatening to devastate South Africa’s already vulnerable economy. The Africa Growth and Opportunity Act (AGOA) is up for renewal in 2025 and billions of dollars in aid is also at risk.

AGOA, a lifeline for our economic survival, underpins trade worth approximately R50 billion annually, supporting substantial economic activity across critical sectors including automotive, manufacturing, and agriculture industries.

A carve-out of South Africa from AGOA’s preferential trade terms would unleash a domino effect on our economy. South African exporters would grapple with heightened barriers to entry in the US market, causing a sharp contraction in export volumes, diminishing investment, and triggering a devastating loss of between 62 000 and 100 000 direct and indirect South African jobs.

Further compounding the ANC government’s abandonment of its non-aligned foreign policy is the stark failure to comprehend the symbiotic relationship between trade policy and foreign policy. In the crosshairs of possible US retaliation, South Africa stands to lose more than just AGOA. Our actions as a perceived direct military supplier to Russia contravenes one of the fundamental conditions for trade with the US: that its trade partners should not engage in activities that undermine Washington’s national security interests.

Pitifully out of touch with these realities, Finance Minister Enoch Godongwana proclaimed in Parliament that AGOA is not at risk and DIRCO’s Clayson Monyela bizarrely claimed that the US relies on SASOL for its energy security. These false claims not only endanger our international standing but also jeopardize planned diplomatic engagements, including a recent diplomatic mission designed to address our growing impasse over SA’s pro-Russia stance, which could harm bilateral trade between the two countries worth R400bn and put at risk the over 600 US businesses that operate and provide jobs in South Africa.

Our relationship with the United States since 1994 has been one of benefaction, with foreign investments pouring in, amounting to billions, including PEPFAR, a significant public health initiative tackling HIV/AIDS. The ANC’s reckless gambit risks an abrupt severing of these vital lifelines, with potential consequences that are nothing short of catastrophic. This year alone, PEPFAR contributes approximately R8.8 billion to our health sector.

The ANC’s audacious disregard for the essential role of robust relations with the US is deeply regrettable. These ties are the bedrock of South Africa’s economic well-being and global standing, and the ANC’s failure to recognize this reality threatens not just our credibility, but our very place in the global community.

The DA remains committed to freedom, democracy, human rights and the rule of law. Our resolve remains unshaken: to secure South Africa’s position as a competitive player on the global stage, nurturing economic partnerships that drive growth and prosperity for our people and our nation. South Africa households are already battling a government induced cost of living crisis and destroying our economic relationship with the US will make that crisis look like a picnic.