South African businessmen once again set sail against the Russian cargo ship Lady R ‘s visit to South Africa and says it has increased the cost of doing business with the rest of the world exponentially.
Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says shortly after the Lady R ‘s visit came to light, the rand’s value tumbled and major world powers got their noses up about South Africa’s alleged involvement with Russia in the war with Ukraine.
“I can understand why those who side with Ukraine were disturbed by the news,” says Mavuso.
“The circumstances of the visit were suspicious and the lack of an immediate explanation from the South African National Defense Force (SADF) exacerbated the uncertainty.”
Countries that are members of the North Atlantic Treaty Organization (NATO) import many of South Africa’s manufactured goods and raw materials, and have large investments in South Africa.
“Since the incident, South Africa has been a dubious counterpart for Western trading partners. The incident also raised the risk that our trade access to the US could be curtailed when that country reconsiders the African Growth and Opportunity Act, better known as the Agoa Agreement.”
Pres. Earlier this year, Cyril Ramaphosa set up an independent panel to investigate the Lady R-to investigate the incident. According to Mavuso, business people then appealed to the president that the investigation be completed as soon as possible to reduce the damage to the country’s image.
“The investigation had the potential to help correct the risk premium to which we are now subject,” says Mavuso.
“To do this, the investigation would have had to be thorough and credible to reduce fears that South Africa is involved in the war between Russia and Ukraine.”
Last week, Ramaphosa released the executive summary of the investigation because, according to him, the full report contained sensitive and classified information that would threaten the country’s security.
“Unfortunately, the summary does not give a definitive version of what happened,” says Mavuso.
“It gives limited information about the goods that have been delivered and it does not mention, for example, which licenses have been issued in terms of the National Conventional Arms Control Committee for the import.”
The summary indicates that with the Lady R-sage a number of provisions have been breached relating to commercial vessels mooring at South African ports.
However, according to Mavuso, the report does little else to highlight any wrongdoing. It also leaves people with even more questions about exactly what happened.
“The geopolitical concerns that Lady R has not been eliminated (by the report), therefore businesses must continue to manage the risks associated with this.”