South Africa appears to be the verge of losing the benefits of the African Growth and Opportunity Act (Agoa) from the US government. The reason for this is the country’s decision to remain neutral in Russia’s invasion of Ukraine. South Africa's government had formally taken a neutral stance on Russia's unlawful invasion of Ukraine, but had deepened its military relationship with Russia over the past year. Now, economists are warning of the consequences to the already strained economy.
On top of this, there are concerns that South Africa would host the BRICS Summit, with the government hoping to strengthen its ties with China and Russia, and was working to facilitate the participation of president Putin.
US legislators said that though the Agoa eligibility review process for 2024 was under way and that decisions had not yet been made, they were questioning whether a country in danger of losing Agoa benefits should have the privilege of hosting the 2023 Agoa Forum.
South Africa imports and exports virtually nothing from Russia, at 0.2% and 0.1%, while risks losing up to 40% of its trade if sanctions are imposed against it by the West, which would drive the economy into a deep, severe recession, extreme rand weakness and collapse in government finances.
Source: iol.co.za