By 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. The rand rallied after dropping to a record last week.
“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 gained as much as 1.8% and traded 1.5% stronger at 19.0436 per dollar by 12:54 p.m. in Johannesburg on Monday. The yield on the nation’s local-currency bonds due 2032 fell 19 basis points to 11.4%. They had climbed 76 basis points last week on concern that the US could punish South Africa over the allegations.
US Ambassador to South Africa Reuben Brigety ignited a furor on May 11, when he 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 him for going public with it.
The Americans had 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.
The market’s negative reaction to the news “could have a massive disruption to our fiscal framework,” and a recovery 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 stabilize.”
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 tensions, with South Africa’s government expressing “utter displeasure with his conduct” and then summoning him to explain his remarks. He “admitted that he crossed the line and apologized unreservedly,” it said.
Both sides later pledged a commitment to working together, with neither addressing 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.
- Cyril’s Rubicon? RW Johnson on arms-to-Russia torpedo for SA’s motor industry, AGOA, ARV supplies.
- Rand hits all-time low of R19.27/$ after US says SA is supplying arms to Russia.
- SA probes allegations of weapon shipments to Russia despite neutrality on Ukraine invasion