Ministers are still dumping on South Africa’s biggest trade partners – but they have it all wrong: CEO

 ·24 Jul 2023

Despite the BRICS bloc offering a host of opportunities for South Africa, Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso says these opportunities should not get in the way of the nation’s relationships with the West.

Mavuso said that it is right for South Africa to cultivate a relationship with the BRICS bloc, particularly India and China which are enormous and fast-growing markets.

She also noted that the nation’s trading relationships with the West are essential to the nation’s economic well-being and cannot be abandoned for more significant ties with the East.

However, parts of the government are taking a separate approach on the matter and leaning heavily toward anti-Western rhetoric.

Speaking at the BRICS Youth Summit last week, Nkosazana Dlamini-Zuma, minister in the presidency for women, youth and persons with disabilities, presented BRICS as a means to hasten the downfall of the “unjust imperialist order” instead of focusing on the opportunities that BRICS presents to South Africa.

”The speech was heavy on rhetoric that presented BRICS as a competitive pole in the world against the West rather than an alliance designed to enhance the development and cooperation of its members,” Mavuso said.

“Ironically, in the same speech, Dlamini-Zuma bemoaned those who prefer us shipping raw materials rather than manufactured goods to the world. She did not pause to consider that our relationships with India and China are overwhelmingly characterised by South Africa exporting raw materials and importing manufactured goods.”

“She ignored that it is Europe and the United States that import by far the majority of our manufactured goods, including vehicles and machinery made here, the kinds of goods that drive industrial activity and add more value to our economy.”

Mavuso said that the pattern of exporting low-value-added exports to Asia should be changed to allow for the trading of more goods with more value-added, but did not understand how this would be achieved by alienating Western markets.

She said that South Africa should use its manufacturing base that is boosted by Western trade to improve scale and competitiveness to gain a competitive foothold in Asia.

“Immense harm would be done to our industrial base if we collapsed the trade relationships that currently sustain it without any competitive access to new trading markets.”

Although China, India and Brazil are highly-populated areas that can create massive demand for goods that South Africa could potentially provide, Mavuso said that South Africa needs to be realistic with these opportunities.

For instance, China may have a strong desire for mineral resources, but its highly-competitive manufacturing capability would be a challenge for South Africa to compete with.

“China clearly is interested in maintaining access to our raw materials, but our focus should be on creating opportunity for value-added goods and services exports.”

Some hope

That said, concerns over the BRICS summit have waned over the last week, with Russian Leader Vladimir Putin confirming that he will not attend.

The International Criminal Court – of which South Africa is a member – issued an arrest warrant for Putin for war crimes committed in Ukraine, and South Africa, by law, would have to arrest the leader if he stepped foot in the country. President Cyril Ramaphosa warned that arresting Putin would be tantamount to declaring war on Russia.

However, Mavuso said that Russia still presents some risks given the war in Ukraine, adding that South Africa should not suggest that its relationship with BRICS implies an endorsement of Russia.

Read: E-toll refunds, state banks and NHI – South Africa wasting time on things ‘that will never happen’

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