Godongwana: US won’t sanction SA over weapons row, and market reaction will stabilise

16 May, 2023 - 00:05 0 Views
Godongwana: US won’t sanction SA over weapons row, and market reaction will stabilise South African Finance Minister Enoch Godongwana

eBusiness Weekly

Paul Vecchiatto


South African Finance Minister Enoch Godongwana said his country resolved a row with the US over allegations that Pretoria supplied weapons to Russia and it’s unlikely to face any repercussions.

A furore erupted on May 11, when US Ambassador to South Africa Reuben Brigety told reporters that armaments were collected by a Russian cargo ship, the Lady R, from the Simon’s Town naval base in Cape Town in December. South Africa’s government denied the accusation and criticized Brigety for going public with it.

The Americans first raised their concerns about the matter two months ago, Godongwana said in an interview in Cape Town on Sunday. President Cyril Ramaphosa asked his security adviser and an independent judge to investigate, and dispatched a delegation to the US to ease tensions, he said.

“A number of actions were taken in order to ensure that our relationship with the US remains and that relationship should be normal and cordial,” the minister said. “The Americans are not likely to respond with any anger tomorrow.”

The rand slumped to its weakest level on record against the dollar and yields on government bonds soared last week, amid investor concern that any escalation in the diplomatic row may put trade worth billions of dollars at risk.

The market reaction “could have a massive disruption to our fiscal framework,” and a recovery in the rand and the nation’s bonds will depend on whether investors are comforted that the issue has been resolved, Godongwana said. “Once people realize that the matters raised by the ambassador have been dealt with, I think that things are going to stabilise.”

On Monday, the currency gained as much as 1.6 percent to trade at 19.0303 per dollar by 8:27 a.m. in Johannesburg

Relations between South Africa and the US have soured over Pretoria’s insistence that it’s taken a non-aligned stance toward Russia’s war in Ukraine.

Brigety’s comments exacerbated the tensions, with South Africa’s government expressing “utter displeasure with his conduct.” The ambassador had been summoned to explain his remarks and “admitted that he crossed the line and apologized unreservedly,” it said.

Partnership Pledge

Both sides later pledged a commitment to working together, yet neither addressed the veracity of his claim that South Africa had sent weapons to Russia.

Brigety said in a tweet that he was grateful for the chance to “correct any misimpressions left by my public remarks” and a State Department spokesperson didn’t dispute Pretoria’s characterization of his statement as an apology.

Godongwana said all South African weapons sales had to be vetted by a cabinet committee, and no official decision had been taken to supply Russia.

“If it did happen as the Americans claim, it could be a conduct of people who were mischief makers,” he said. “People who have got that information must provide that information to the judge so that we can take the necessary action.”

Ramaphosa on Monday reiterated South Africa’s determination to remain non-aligned in the conflict between Russia and Ukraine.

“South Africa has not been, and will not be, drawn into a contest between global powers,” he said in his weekly statement

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