ANC and DIRCO is courting economic catastrophe through Russian alignment

30 May 2023

In the wake of the South African Reserve Bank's (SARB) Financial Stability Review, the ANC government's complacency towards global economic threats to our nation is laid bare. The SARB's warning of the potential devastation, by means of secondary sanctions, to our financial system as a consequence of the ANC's stance on the Ukrainian crisis is deeply alarming.

The threat of secondary sanctions could see South Africa banned from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which processes more than 90% of our international payments. The ANC's imprudent alliances threaten to sever this critical lifeline and thereby jeopardise hundreds of billions of Rands in trade.

This precarious situation directly highlights how the ANC undermines the independence of the SARB, a principle that should remain inviolable and how the Government's actions have indirect yet profound impacts on its operation. By failing to cultivate a favourable fiscal environment and tacitly endorsing Russia’s invasion of Ukraine, the ANC is sabotaging any effort to combat inflation, indirectly influencing Monetary Policy Committee (MPC) outcomes.

The ANC's irresponsible stewardship clearly is the root cause of our economic woes, from our plummeting Rand to our heightened risk of sanctions. The party’s ill-advised decisions are not only further blunting our monetary instruments, but their political manoeuvrings have left the SARB's primary tool, the repo rate, ineffective.

The irony of last week’s repo rate hike coinciding with a sharp depreciation of the Rand underlines the presence of destabilising factors beyond the control of monetary policy. The ANC's mismanagement, their political posturing, and their dismal failure to control issues like the incessant load-shedding crisis, are these destabilising forces.

The party’s proclaimed 'non-aligned' position regarding Russia’s illegal invasion of Ukraine is nothing but a façade. Their abstention from UN votes denouncing Russia's aggression, paired with the covert arms transfer to the Russian vessel 'Lady R', is a clear endorsement of Russia's belligerence. This demonstrates the ANC's misplaced loyalty to Russia, a loyalty that trumps the well-being of South Africans, and is hurtling us towards an economic catastrophe.

The DA’s commitment to the well-being and interests of the South African people remains steadfast. We remain unwavered in our mission to hold the ANC government to account. We have submitted written parliamentary questions to the Minister of Finance, Enoch Godongwana, pressing for a clear understanding of the potential financial repercussions of sanctions on South Africa. Moreover, we will write to the Minister, demanding a comprehensive strategy to shield our nation from the ANC's detrimental policies and to avert an impending economic catastrophe.

Issued by Dion George, DA Shadow Minister of Finance, 30 May 2023