DAN SWIFT: How to prevent your portfolio paying the price for SA’s foreign policy

Despite mounting warnings that US tariffs could cost SA tens of thousands of jobs, the JSE all share index is up about 20% year to date. However, investors are overlooking a far more serious threat than tariffs: the growing bipartisan momentum in Washington to impose targeted sanctions on ANC officials because of their support for authoritarian regimes and militant actors.

These risks are real. Investors should check their portfolios for links to ANC officials. The Trump administration has already imposed tariffs of up to 30% on most SA goods. That could rise to 40% with additional proposed tariffs on Brics member countries. There also appears to be little political will to reauthorise SA’s long-standing trade preferences.

Analysts in SA are downplaying the impact of tariffs. For instance, Standard Bank’s economics unit estimates that a 10-point increase in tariffs would reduce GDP by just 0.1%. While technically sound, these aggregate figures obscure the political and economic impact of concentrated losses, especially in a country with only 1.3% projected GDP growth and a youth unemployment rate of 62.4%.

But the risk from US sanctions is far greater. The dominant ANC’s foreign policy has raised serious concerns across the American political spectrum. The party’s deepening diplomatic, economic and security ties with Russia, Iran, Hamas, Hezbollah and China have led many in Washington to question whether SA remains a reliable partner.

For decades the US supported SA’s democratic transition with trade preferences, development assistance and diplomatic support. The ANC’s alignment with regimes that threaten US interests, particularly Iran, is now a red line in Washington.

The Trump administration has already taken steps to signal its dissatisfaction. It has suspended development assistance, expelled SA’s ambassador, refused to send top-level officials to meetings that SA hosts and imposed steep tariffs. Meanwhile, the ANC wants to donate a municipal building in Pretoria to the Iranian government for a cultural centre, seemingly urging the Trump administration to impose targeted sanctions.

The ANC has long presented itself as a moral voice on the global stage, anchoring its foreign policy in human rights and international law. Yet it now openly aligns with authoritarian regimes and militant actors, and the US Congress has taken notice.

In July, the House of Representatives foreign affairs committee advanced a bill requiring the state department to assess SA’s ties to sanctioned actors and identify individuals who may be eligible for sanctions under the Global Magnitsky Act. The Trump administration can also impose sanctions on ANC elites via executive order.

ANC elites sit on the boards of publicly traded companies. One prominent example is Mcebisi Jonas, SA’s special envoy to the US, who recently failed to get a US diplomatic visa. Jonas chairs MTN Group, which faces litigation in the US over alleged violations of sanctions on Iran.

MTN has also faced allegations, dating back to when President Cyril Ramaphosa chaired its board, of bribing Iranian officials with offers to support Iran’s military and nuclear programme in exchange for market access. MTN is now subject to a federal criminal investigation by the US department of justice.

Jonas also sits on the board of Northam Platinum Holdings.

Both companies have significantly outperformed the JSE all share index this year and markets are treating these stocks and others as if there is no risk of sanctions. But just a few designations could trigger board resignations, institutional divestment, reputational damage or debanking. The exact economic effect of sanctions in SA is unknowable at this point, but at a minimum investors should examine their investments closely for links to ANC figures.

The ANC itself still has a choice. It can still strengthen anti-corruption enforcement, recalibrate its foreign policy and re-engage with the democratic world. These are not easy moves, but they are necessary if SA hopes to preserve access to US markets and maintain international credibility.

Investors should take note: the shift in Washington is not rhetorical. It is bipartisan, operational and accelerating. Those who fail to adjust may soon find themselves caught in the crossfire, with their portfolios paying the price for SA’s foreign policy.

• Swift, a retired US diplomat who was acting co-ordinator for Prosper Africa, is a senior research analyst for economics, finance and trade at the Centre on Economic & Financial Power at the Foundation for Defence of Democracies.