Russian President Vladimir Putin (left) and South African President Cyril Ramaphosa attend a signing ceremony after their meeting on the sidelines of the BRICS (Brazil, Russia, India, China and South Africa) summit in Johannesburg, South Africa, 26 July 2018. (Photo: EPA-EFE / Alexei Nikolsky / Sputnik / Kremlin Pool)
By Ed Stoddard
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13 Aug 2023 4
Data show that Russia is an insignificant trade partner of South Africa. In terms of economic partnerships, it is a clapped-out Lada vehicle, a lemon with not much juice to be squeezed from it.Listen to this article0:00 / 6:091XBeyondWordsAs the BRICS 22-24 August summit looms in Johannesburg — in the shadow of Pretoria’s difficult diplomatic dance over Moscow — it is important to note just how unimportant Russia is to South Africa’s economy.South Africa exports mostly citrus to Russia, giving it a shot of vitamin C. Russia exports mostly fertiliser to South Africa — and briquettes for our braais.As a percentage of South Africa’s trading relationship with other BRICS members, trade with Russia barely registers. At a BRICS Business Breakfast last month, some useful data underscored the point that Russia is basically a brick compared with the Great Wall of Chinese trade flows to South Africa.“SA’s trade with Russia is relatively low, representing only 1.7% of the country’s total trade (exports + imports) with the BRIC economies in 2022,” the presentation said.“Relatively low” is an understatement. The other BRICS members — China, Brazil and India — account for 98.3% of South Africa’s trade within the grouping. China has the tiger’s share at 67.6%.Whatever was loaded on the Lady R Russian cargo ship might have made a material difference to South Africa’s 2022 trade data with Russia, even if it was only lemons and koeksisters.On a global scale, Russia was the destination for 0.2% of South Africa’s exports in 2022.Citrus being the main export to Russia is logical as it is a crop that needs a hot, frost-free climate. Russians drink vodka without orange juice for a reason.Citrus made up 47.7% of South Africa’s exports to Russia last year; apples and pears were second at 22%.South Africa’s exports to Russia have been declining in recent years. Russia’s economy is currently stuck in a deep recession — mostly because of Western sanctions and the fact that it is a kleptocracy — so fewer Russians are going to be able to splash out on naartjies this year.It’s simply not a growing market for South African goods, even for the stuff that Russia can’t grow itself.On the flip side, South Africa’s imports from Russia were almost double the value of exports going the other way, at $540-million. But that’s still not much. South Africa’s imports from China last year amounted to $22.4-billion.South Africa’s top imports from Russia were various fertilisers, copper wire and coal, including for briquettes. All could be easily substituted. Copper wire is commonly stolen in South Africa, so, ironically, a key import from a gangster state is a product that fuels gangsterism here.South Africa’s main imports from China, by contrast, are things like cellphones, “data processing machines” and vehicles (all of which get stolen a lot), as well as electric accumulators and transformers. Useful things.South Africa’s top exports to China are iron ore, manganese, ferroalloys and chrome — stuff often used to manufacture the stuff that China exports here. But at least the trade volumes are material and the relationship makes sense.About the best that can be said for South Africa’s trade relationship with Russia is that some of the fertiliser it sends here might be used to grow some of the citrus that we send there. As far as economic partnerships are concerned, this is like a second-hand 1980s Lada vehicle — it’s effectively a lemon and there is not much juice to be squeezed from it.The broad WestBeyond BRICS, the US accounts for 8.8% of South African exports, and about 600 US companies have investments here. The EU took 21.3% of South Africa’s exports last year.This means the broad “West” accounts for more than 30% of South Africa’s exports.Small wonder some people in the government are scrambling to retain South Africa’s status as a beneficiary of the US African Growth and Opportunity Act (Agoa) as Pretoria’s “nonaligned” stance in the Russian-Ukrainian conflict comes under scrutiny. Agoa provides preferential access to US markets for exports of various products from qualifying African countries.But they are rowing against tidal forces in the ANC that hold nostalgic — and in many ways ahistorical — memories of Moscow’s opportunistic backing of the liberation struggle during the Cold War.The South African Reserve Bank — an outfit not given to hyperbole — warned in May that if secondary sanctions were imposed on Pretoria because its neutral stance was viewed as “unconvincing … the South African financial system will not be able to function if it is not able to make international payments in USD”.That warning came with the rand close to historic lows near 20/dlr, in part because of concerns about South Africa’s relationship with Russia.This ham-fisted game of diplomatic drama, which included the joint naval exercises with China and Russia in South African waters in February, has cost the economy dearly. The rand’s decline has kept inflation on the boil and interest rates on the rise — thanks to jitters over links to a country that South Africa hawks fruit to in exchange for fertiliser.The rand rallied nicely after Russian President Vladimir Putin said he would skip the upcoming BRICS summit. The currency has since given up much of that ground.It’s hard to think of similar cases of an economy so unimportant having such an impact on another.A small brick can make a big hole in a window, but hopefully this fiasco has also shattered some illusions in the ANC. DM