Very serious threat to South Africa

President Cyril Ramaphosa’s attack on the United States can have severe consequences for South Africa, including sanctions against Americans holding South African government debt.

On Tuesday, 25 February 2025, President Cyril Ramaphosa and others published an article in Foreign Policy Magazine.

His co-authors were Malaysia Prime Minister Anwar Ibrahim, Colombia President Gustavo Petro, and Hague Group Chair Varsha Gandikota-Nellutla.

The Hague Group is a coalition between South Africa, Bolivia, Colombia, Honduras, and Namibia.

The article focuses heavily on Israel’s war in Gaza, calling it an assault against the Palestinian people, echoing dark chapters in their own countries’ histories.

Ramaphosa promised severe action against Israel and its leaders, including arresting Israeli leaders and preventing vessels carrying military supplies to Israel from using South Africca’s ports.

The authors also took aim at United States President Donald Trump, saying his proposal to ‘take over’ Gaza strikes at the very foundations of international law.

They argued that it meant “annexation followed by ethnic cleansing of the Palestinian population, who Trump has suggested should be deported to Egypt and Jordan”.

“Such actions, if pursued, would constitute a grave violation of international law and the fundamental principles enshrined in the UN Charter,” they said.

This article will further increase tensions between South Africa and the United States and deteriorate the relationship further.

In February, Trump froze all United States aid to South Africa over rights violations stemming from the new land expropriation law.

The impact will primarily affect the more than $400 million annual funding for the country’s longstanding AIDS prevention and treatment program.

After Ramaphosa’s article on 25 February 2025, Trump ordered an immediate end to USAID funding for HIV organisations in South Africa.

It is not only Trump who is taking a hard line. Four US Congress members – Andrew Ogles, Tom Tiffany, Joe Wilson, and Don Bacon – wrote to Trump about South Africa.

They urged him to revoke South Africa’s trade benefits under the African Growth and Opportunity Act (AGOA) and consider suspending diplomatic ties.

The members argued that South Africa has repeatedly undermined US interests and violated AGOA’s eligibility requirements.

Serious threat to South Africa

Joel Pollak, the frontrunner to become the United States’ next ambassador to South Africa, told Biznews that sanctions against South Africa are definitely on the table.

He said Ramaphosa’s article significantly raises the stakes and gives the Trump administration reason to kick South Africa out of the AGOA.

There can also be sanctions against South Africa and specific politicians and groups for their conduct and anti-United States stance.

Renowned political and economic analyst Frans Cronje also suggested that sanctions could be imposed against South Africa.

He said sanctions could hurt numerous big South African industries, including the automotive manufacturing sector.

Losing the AGOA benefits will also hurt a group of South African businesses. However, this is not the biggest threat.

Cronje said the most critical thing financial institutions and citizens should watch is sanctions on holding South African government debt.

“If that step is taken, the consequences inside the South African economy and for anyone who does business in the country is very serious,” he said.

He said the South African government’s current actions are suicidal for the country’s economy and trade relations.

Efficient Group chief economist Dawie Roodt also highlighted that the United States and Europe are the biggest investors in South Africa.

He said South Africa’s markets, especially the capital markets, are liquid and easy for foreigners to access.

“The South African capital market offers a good yield to investors from the United States and Europe,” he said.

He warned that if President Trump decides to ban Americans from investing in the South African markets, it would be far more damaging to the economy than a trade embargo.

Roodt said South Africa must realise that President Donald Trump is the most powerful man in the world and act accordingly.

“He is in charge of the biggest economy in the world. Whatever he says or does will have a huge impact on South Africa,” Roodt said.

“We must understand that if we don’t polish Trump’s ego, we will pay a very dear price. South Africa cannot afford that.”