X Close

Why South Africa is siding with Russia The ANC can't afford to be virtuous

Cosying up to Putin? (Moeletsi Mabe/Sunday Times/Gallo Images/Getty Images)

Cosying up to Putin? (Moeletsi Mabe/Sunday Times/Gallo Images/Getty Images)


November 11, 2022   6 mins

It was a Russian oligarch’s superyacht scudding towards Cape Town that brought global attention to South Africa’s refusal to condemn Russian aggression. A couple of weeks ago, both Cape Town’s Mayor and the Premier of the Western Cape — members of the opposition — demanded that Alexey Mordashov’s vessel be refused entry to South African territorial waters, where it was seeking sanctuary. The pair accused the oligarch, allegedly an ally of Russian President Vladimir Putin, of being an “enabler” in the invasion of Ukraine.

Not happening, said Vincent Magwenya, spokesperson for South African President Cyril Ramaphosa. There were no legal grounds for refusing the Nord docking permission. In this, he was right. But the row has served to remind us what drives the ruling African National Congress’s policy towards Russia and its allies: ideology and nostalgia, self-interest and greed.

The old guard of the ruling African National Congress, who still haunt every crevice of government here, have not forgotten that Russian support was crucial in their 80-year anti-apartheid struggle, finally won in a negotiated settlement in 1994. Many of the ageing elites studied at Russian or Bloc country universities. They may have forgotten the USSR’s egalitarian mantras in their rush to become wealthy, but nostalgia still lingers. The Russians have not been slow to capitalise on it.

Jacob Zuma, the disgraced former President currently facing criminal charges over alleged corruption in a 1999 arms deal, commissioned Russia’s Rosatom energy company to build eight nuclear plants in 2014. If completed, at a cost of £50 billion, the plants would have provided 23% of South Africa’s energy — and given the Russians an effective stranglehold over the country’s economy. Karyn Maughan and Kirsten Pearson, in their 2022 book, Nuclear, suggest the deal was clinched after Zuma received medical treatment in Russia for poisoning. The former President alleged a toxin had been administered by one of his wives at the behest of the CIA. No proof of this poisoning has ever been provided, but there is plenty of evidence of a strong bond forged between presidents Zuma and Putin afterwards — the latter reportedly knowing a bit about poisons.

The nuclear deal was eventually scuppered in April 2017, when the Western Cape High Court, in response to two applications from activist environmental groups, declared that any such agreement needed the approval of Parliament. The Treasury, which had opposed the deal as unaffordable and unlawful from the start, breathed a sigh of relief. The decision was, however, catastrophic for the finances of the ruling African National Congress. Even before Zuma’s tenure, many major donors to the party’s coffers came from the legions of shady businesspeople who benefitted from what became grandly known as State Capture — that is, put simply, the embezzlement of public money. The nuclear deal, dwarfing in nefarious intent the infamous 1999 arms deal in terms of potential kickbacks, would have set up the ANC for decades.

Worse was to follow. The new President, Cyril Ramaphosa, launched a laudable if achingly tardy crack-down on corruption four years ago, insisting on transparency in party funding. This instantly deprived the ANC of its steady flow of murky money. And donations have dried up: the big corporations who had generously funded Ramaphosa’s bid to wrest the ANC leadership from Zuma in 2017 have long since given up on him, out of exasperation with his hesitant mismanagement of the country. Attempts to raise funds from within the party have also failed. The ANC and its supporting elites have proved in nearly three decades to be far better takers than givers.

The party is now technically bankrupt. Among other debts, it owes a court-ordered £1.5 million to a poster manufacturer for services rendered in the last elections. Staff are regularly unpaid, and they spontaneously strike and picket their own party conferences — wreaking havoc on efforts to prepare for the crucial Elective Conference later this year, at which an embattled Ramaphosa will go for a second term. Neither can the party’s former Treasurer General help much: he is fighting his own corruption charges relating to the procurement of protective equipment during the free-for-all that was South Africa’s Covid response.

Much conjecture surrounds the origin and purpose of a cache of dollar bills, allegedly worth in the millions, stolen two years ago from inside a sofa in Ramaphosa’s game lodge. The whistleblower was Arthur Fraser, the former head of Zuma’s privatised State Security Agency. Fraser also served as head of the prison services, during which time he unlawfully let Zuma out of prison on health grounds while he was serving a sentence for contempt of a commission into state corruption — a commission which Zuma had himself appointed. Sound bizarre? Not for South Africans. The theft of the dollars is under a typically ponderous investigation by law enforcement authorities, but nobody expects a result before the Elective Conference. If the moola was intended as the ANC’s bailout money, from whence came it?

The only discernible source of legitimate income for the ANC is via Chancellor House, the party’s in-house investment company. Its biggest stake is in the South Africa’s fourth-largest manganese miner, United Manganese of Kalahari. UMK was the sole declared donor to the ANC in the 2021-22 financial year, to the tune of £500,000, as disclosed in the latest Parliamentary filings. And UMK — wait for it — is part-owned by the Russian oligarch Viktor Vekselberg’s conglomerate Renova Group.

Vekselberg ostensibly sold off his interest in UMK after sanctions were imposed on him by the United States in 2018: he ranks near the top of the United States’ Least Favourite Russians list, primarily for his inner-circle place in the Kremlin, and for leading a technology hub that was subsequently deemed by American authorities to be a front to access US intellectual property. But he remains invested in UMK through a new vehicle, a trust of which he owns 25%. And the oligarch may well object to the seizure of yachts: his motor yacht Tango was impounded in April by Spanish authorities.

Still, it is not only these skeins of party and personal interest that inspire South Africa’s position on the Ukrainian invasion. At its heart lies something broader: realpolitik. South Africa is a proud member of the BRICS club, alongside Brazil, Russia, India and China. It is Africa’s token member of a group which is widely seen on the continent as a counterbalance to the historic power and influence of the developed western nations. The BRICS’s New Development Bank, set up in 2014, has a loan book only slightly smaller than the World Bank’s, while not being encumbered by a $160 billion commitment to patch up Western economies after their self-immolation in the pandemic. Neither is 35% of its investment tied to the chimera of climate change mitigation.

South Africa has a $25 billion share of the bank — which has not been sapped, as the IMF has in propping up the euro. The Contingent Reserve Arrangement (CRA) gives unlimited drawing rights to club members that need to stabilise their currencies. China and Russia’s foreign currency reserves are eight times larger than the US and Europe’s combined, give or take a few problems on Russia’s side in accessing its share while sanctions remain. China has the four largest banks in the world and owns 55% of the world’s shipping. Russia, despite having a Third World army, is self-sufficient in energy and food. These nations are, in short, worth keeping on-side.

Russian trade only comprises a minuscule 0.4% of South Africa’s total trade — and Russian investment in South Africa is a puny $1.5 billion compared to South Africa’s $5.13 billion stake in Russia. But South Africa’s dependence on Russia isn’t straightforwardly economic. Rather, it stems from a need to keep the BRICS club happy, particularly China and India — the latter having extensive personal and financial dealings with South Africa’s hugely entrepreneurial Asian minority, much of it through Dubai.

China has been investing heavily if not always ethically in Africa. So far it has sunk $70 billion in the continent, $25 billion in South Africa alone, creating an estimated 400,000 jobs. In February this year, it promised another $300 billion. The problem, a big one, is that its targets remain largely in the extractive industries and its practices are generally rip-and-run. There is little skill transference to the locals and limited social investment. And the increasing number of expatriate Chinese workers-turned-settlers do not easily assimilate wherever they land in the continent.

South Africa still takes money where it can find it: most recently $497 million from the World Bank to bail out its crippled electricity grid, and $4.3 billion from the IMF in emergency post-pandemic support. But the financial and fraternal allure of the BRICS club to South Africa is still overwhelming — and it is more important, Ramaphosa’s government firmly believes, than taking sides in a distant, intra-Slav war over an old border dispute. Besides, the argument goes, why should South Africa trust the US and Europe? A fair question, given America’s friends once included Vietnam, Iran, Afghanistan, Libya and Iraq.

So, while Russia moves to the next stage of total and irreversible war and China uses the pandemic as an excuse to keep its borders shut and reduce its exposure to the global economy, South Africa, like many other non-aligned nations, is manoeuvring. The aim is to be on the winning side of the real conflict behind the one involving tanks: the battle between old Western and new Eastern money. And while that battle is playing out, no fugitive Russian super yacht is ever going to be refused safe harbour in Cape Town.


Brian Pottinger is an author and former Editor and Publisher of the South African Sunday Times. He lives on the KwaZulu North Coast.


Join the discussion


Join like minded readers that support our journalism by becoming a paid subscriber


To join the discussion in the comments, become a paid subscriber.

Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.

Subscribe
Subscribe
Notify of
guest

30 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
James Rowlands
James Rowlands
1 year ago

I visited South Africa in just before Mandela got out if prison. A lovely rich clean country with whites who looked nervously at the fate of Rhodesia Zambia and almost everywhere else on that continent and pretended it seemed to me that some how this time it would be different.

The white liberals remind me so much of the left in the UK. They believe in fairytales of their own making that e.g. net zero will work, undocumented immigration is not going to lead to more crime. When the facts are already known.

Everyone knew what would happen when they put a terrorist organisation in charge of a country. They had seen it happen time after time in Africa before. But they did it anyway and destroyed the future health and prosperity for everyone black and white.

Why did you do this??? Is the question I asked from afar. My South African friends gave me extremely liberal answers which everyone except themselves could see was at best naive and at worse 



Also the more relevant question. Are we going down the same road of deliberately destroying our own country ( and people) to satisfy what is clearly, ideological wishful thinking?

To me and I think a lot of people it is obvious that we are.

Tony Price
Tony Price
1 year ago
Reply to  James Rowlands

WOW – it’s as if Apartheid didn’t happen and all in SA were rich and happy! As ye sow so shall ye reap

R Wright
R Wright
1 year ago
Reply to  Tony Price

Well they were certainly richer.

Jonathan Story
Jonathan Story
1 year ago
Reply to  Tony Price

No. Apartheid di happen. What has happened since was predictable.

Bill Bailey
Bill Bailey
1 year ago
Reply to  Tony Price

The BLM want Apartheid, so why the problem?

Bill Tomlinson
Bill Tomlinson
1 year ago
Reply to  Tony Price

Do you have even the faintest idea what “apartheid” means?

Let me enlighten you. It means “partition” . The clue is that both words contain the letters p-a-r-t .

Ironically, the most militant of America’s Black organisations want exactly that: partition.

Of ccourse, not everyone in South Africa was wealthy.

Yet it was so much richer than its neighbours that Blacks from as far away as the Congo made their way to Johannesburg, which they called “eGoli” – The Place of Gold – if you prefer, El Dorado.

Nell Clover
Nell Clover
1 year ago

Old money or new money? Money exists to buy things and stuff, now or in the future. It literally has no other purpose.

The West once made or owned the production for really useful stuff and created some really nice things from the earnings. One needs the currency of the seller to buy the really useful stuff and really nice things. So the West’s then new money came to dominate the world.

Over time, the West has made less of the really useful stuff and owned less of the production too, but it has a stock of really nice things – assets, real estate, banking, courts – that has remained in demand. Yet whilst really useful stuff can be made ad infinitum, nice things are hard to replace. Nice things can only be a net sale to a foreign buyer once, unless there is a speculative bubble in nice things. So asset bubbles have become absolutely essential to supporting the West’s now old money. Bubbles mean successive foreign buyers need more and more Western currency to buy the ever inflating nice things. When nice thing prices get too high and foreign demand moderates, the bubble must be deflated – and the foreign owners left out of pocket – in order to begin the cycle once again. This rinsing of foreign capital will over time debase the niceness of the really nice things until they stop being nice.

We saw this effect in the UK after new money industrialists and their industrial economy created more really useful stuff than the old money land owning gentry were creating. The long decline of the aristocracy began: living in the past, trading on the past and literally selling off the past – their really nice things – to pay the bills until eventually most of the really nice things had been sold and the really nice things left were looking decidedly less nice and a lot more moth eaten. It took 150 years – until the 1930s – for the threadbare chintz to become obvious (in banking it took even longer for the old City firms to be proved to be busted flushes) but the mirage of wealth did eventually evaporate.

The clear lesson is new money eventually wins, but it might take centuries. South Africa is wise to build relations with new money Asia to access the really useful stuff it offers, but South Africa can’t be too hasty in cutting relations with the old money West and its really nice things that form the existing fabric of international commerce and probably will do so for at least another half century.

Last edited 1 year ago by Nell Clover
Paul Beardsell
Paul Beardsell
1 year ago

I don’t see South Africa siding with Russia, I see South Africa not buying 100% into the Western narrative about the Russia-Ukraine war. I rush to insist I am no Putin apologist, but the idea that no criticism of the West is appropriate is just false. Truth is not quite what we’re fed, there’s propaganda both sides. Similarly, when SA doesn’t side wholeheartedly with the West on *all* aspects of its position that does not mean it sides with Russia.

Will Will
Will Will
1 year ago

Looks like not only should South Africa have continued with the planned nuclear energy programme, it was far more forward thinking than the saps in the UK in charge of our energy policy.

John Hicks
John Hicks
1 year ago

Pottinger continues his Boswell like exposĂ© of this strange and troubled land. Thanks that he does. Without it, as Sgt Shultz observed, “We know nothing!”

Bill Tomlinson
Bill Tomlinson
1 year ago
Reply to  John Hicks

Yet he omits a crucial point. ALL politics in Africa is tribal. President Ramaphosa is a Venda in a Zulu organisation – which means he has to watch his back 24×365.

Aphrodite Rises
Aphrodite Rises
1 year ago
Reply to  Bill Tomlinson

I didn’t understand the power and influence of the tribe in Africa until I was trying to motivate a young woman of African descent, her parents were African, her father still worked in the country where he was born. I told her about a female STEM academic who was the first black woman to be published in an esteemed journal whose father was from the same country as her father. The young woman was interested and asked for the name of the black academic. When I told her the name, she just said, ‘Not of my tribe, ‘ and all interest immediately ceased.

Last edited 1 year ago by Aphrodite Rises
Paul Beardsell
Paul Beardsell
1 year ago

The word tribe is used for people we disparage. We use the word nation for ourselves. African country boundaries were drawn arbitrarily by the colonisers and do not match “tribal” boundaries.

Tim Lever
Tim Lever
1 year ago

“There were no legal grounds for refusing the Nord docking permission…… But the row has served to remind us what drives the ruling African National Congress’s policy towards Russia and its allies: ideology and nostalgia, self-interest and greed.” Yes, of course, illegally preventing a ship docking would have been a principled stand for the…Rules-based Order. You can’t make this stuff up

Tony Taylor
Tony Taylor
1 year ago

Russia has always duchessed tin pot African nations like New South Africa.

Samir Iker
Samir Iker
1 year ago

“There were no legal grounds for refusing the Nord docking permission. In this, he was right.”
And that’s the bottomline.

There is a good reason most of the world outside the US block is refusing to take sides. It’s the same reason why they refused to speak up when Iraq was invaded for non existent WMDs, Libya was destroyed or Yemeni and Kurdish civilians bombed with weapons supplied by the same countries who are squealing about “aggression” in Ukraine.

The world is a nasty place. And the West, though a shining light in terms of human rights and decency inside their countries, are the nastiest around when it comes to behaving internationally with other countries. While the West basks in a glow of self satisfaction in Ukraine, where any avenue of a negotiated peace was blocked off, the likes of South Africa, UAE or India hold their nose and look away.

Edwin Blake
Edwin Blake
1 year ago

Excellent and revealing read. Made connections on the financials that I had not seen before.
Some of hankering for the good old (Apartheid) days in these comments is rather disconcerting though!

CHARLES STANHOPE
CHARLES STANHOPE
1 year ago
Reply to  Edwin Blake

Apartheid pales into insignificance when compared to the atrocities of Communism.

Billy Bob
Billy Bob
1 year ago

Just because Communism killed more people than Apartheid isn’t any reason to praise the latter.
More people died in the concentration camps than in the Rwanda genocide but I’m not going to sit here and talk up the actions of the Hutu militias

Last edited 1 year ago by Billy Bob
Bill Bailey
Bill Bailey
1 year ago
Reply to  Edwin Blake

True, that would be embracing the BLM’s flawed ideology!

Bill Tomlinson
Bill Tomlinson
1 year ago
Reply to  Edwin Blake

In the “good old apartheid days” a Black worker could go to his place of employment to work a night shift – and be reasonably sure that his wife and kids would still be alive when he got home.

Edwin Blake
Edwin Blake
1 year ago
Reply to  Bill Tomlinson

This nostalgia for a lost age is very ill informed. A black worker could not get a place of employment in the first place because the pass laws dumped him in places with nothing.
If he was granted a pass to work in your “Egoli” his family would not be allowed to come along.
And Egoli was named after the gold mines where African labourers worked for very small wages in extremely dangerous conditions. At first no one wanted to work there so blacks were taxed to force them into the cash economy.

Paul Beardsell
Paul Beardsell
1 year ago
Reply to  Edwin Blake

Why is this plainly factual posting down-voted?

Bill Bailey
Bill Bailey
1 year ago

Who says who is virtuous when it comes to 2 former Soviet Republics, now both corrupt oligarchies, fighting over Soviet drawn borders in a post Soviet world?
Add in the fact that this ‘war’ has been going on since the Victoria Nuland incitement to Maidan to begin a coup against a legitimately elected President, and one has to wonder just how much Daddy Biden’s strings are being pulled by Biden Jr. He made a fortune out of Ukraine, and given he appears to have few talents, perhaps it is his lineage that he sold? “My daddy will have your back if you poke the Bear once too often.”

Dave Smith
Dave Smith
1 year ago

The global south has nothing now in common with the West. China is the coming power and they know it. Russia is all part of this as it has thrown it’s lot in with China
We had a good run but it is over. End of an empire that was well overdue .

Martin Smith
Martin Smith
1 year ago
Reply to  Dave Smith

Really? Check the recent situation; maybe China’s going bankrupt even more quickly than the US and EU.

Sophy T
Sophy T
1 year ago
Reply to  Dave Smith

‘We had a good run but it is over’
Who had a good run?

odd taff
odd taff
1 year ago

The current situation where all the world pariahs Russia, North Korea, China and their new friends India and South Africa are in some loose association reminds me of the end of Blazing Saddles where Headly Le Mar calls up all the badest villains in history to attack Rock Ridge.

Martin Smith
Martin Smith
1 year ago

Yet Ramaphosa is ready to accept billions of dollars in long term foreign currency low interest loans, the details of which are secret, from the Western powers to finance the supposed transition from coal to renewables. Great for him and his faction of the ANC in the immediate and short term, especially with the coming Elective Conference, but in the long run? A Western ‘Belt and Road’ that ends up effectively owning SA’s power infrastructure? Whither BRICS then? Plus cą change…

Last edited 1 year ago by Martin Smith
Rod McLaughlin
Rod McLaughlin
1 year ago

The ANC can’t afford to be virtuous

Siding with NATO isn’t virtuous, it’s homicidal, genocidal and suicidal