The ANC’s foreign policy is wrongly based on outdated Cold War ideological approaches, on the old pre-AI economy, and on the incorrect assumption that US President Donald Trump’s administration is a temporary, one-term occurrence whose policies can be sat out by the South African government.
ANC leaders also appear to inflate South Africa’s economic importance to the US and underestimate the absolute importance of the US market and official and unofficial development aid to a South Africa. The country has the lowest economic growth rate for the past decade of any other emerging market, with failing state entities and infrastructure, and rapid de-industrialisation and de-capitalisation.
Many ANC leaders also wrongly believe that South Africa can quickly replace US trade with that of so-called ANC “allies” China, Russia and the rest of Africa.
The results of these flawed assumptions have been that the ANC has engaged Trump in an unstrategic way that is harmful to South Africa’s economic interests. The ANC’s outdated ideological foreign policies, based on yesterday’s world, are out of kilter with our emerging market and developed country peers. It is tantamount to economic suicide.
Eroded moral authority
The ANC has made foreign policy as if it is still the government of Nelson Mandela, with the same moral authority. Yet corruption, state failure and lawlessness have eroded the moral authority of the South African state. In the modern era sovereignty is based on countries’ economic power.
Trump’s coming to power has ushered in a generational shift in the US. It is not only Trump himself, but his ideas, that have significant traction in the US. Trump has come to power at the head of a movement, which will continue even when he leaves the Oval Office.
Long before Trump came to power, the ANC took anti-American positions, even during the Democratic Party presidencies. This was always going to haunt the ANC. Its appointment of only ANC people to interact with the US, people seen by the US administration as anti-American, appeared to everyone but the ANC to be intended to deliberately provoke Trump. ANC leaders’ anti-Trump public statements have been similar to statements made by Venezuelan President Nicolás Maduro before the US captured him.
Long before Trump came to power, the ANC took anti-American positions, even during the Democratic Party presidencies.
Years before Afriforum or Elon Musk complained to Trump about the ANC government, the ANC had been strongly anti-American and had rejected counsel by countless observers, including myself, that such a strategy was bound to backfire in future and harm the South African economy. ANC leaders must accept responsibility for the consequences of their long-standing anti-American policies.
The ANC is not just fighting Trump; it is seen by the US administration to be fighting America. This means even when Trump is no longer around — if, say, the Democrats return to the power — the US will still view the ANC’s South Africa as a hostile entity.
Trump’s sweeping import tariffs have unleashed a global trade war, with all countries trying to protect their industries. Countries now adopt foreign policies based on their domestic economic, technology and business interests — even if they often mask this — not based on Cold War political solidarity considerations.
Trump has upended global politics, economics and trade and forced others — even friends and allies of the US — to focus on looking after their national economic, technology and business interests.
Following Russia’s invasion of Ukraine, Brics members India and Brazil extracted heavy concessions from Russia in return for helping ensure Russia was not isolated at the UN. India got knock-down prices for Russia’s oil. Brazil got knock-down prices for Russian fertiliser.
Meanwhile, the US has extracted critical minerals mining rights from Ukraine for its limited support of the Russian-besieged nation, and China insists on getting mineral rights in return for its loans to African countries.
Economic wars
Beyond the Trump-induced tariff war, the world of today is also experiencing other mini-economic wars. For example, there is a silent “war” being waged between countries to secure the microchips required to power technology.
China’s flooding of other economies with its state-subsidised products, replacing local products, has been as damaging to their economies as Trump’s sweeping tariffs. Many countries have pushed up tariff barriers to protect their domestic industries against China’s state subsidised products flooding their markets.
The world is also seeing broad technological transformation. Technology is changing faster than business or society can adapt. We are seeing the merging of human and AI and of the physical and digital worlds — which makes many old business operational models outdated.
Some minerals are now being artificially made. For example, Botswana recently declared an economic emergency because factory-manufactured diamonds have hit its diamond industry.
Technology has also produced alternatives to cement, and the big economic powers are exploring space to mine mineral resources.
Sadly, the ANC appears to be still stuck in the pre-AI economy, focusing on old-style state domination of the economy and the factory as the linchpin of the economy.
It has failed to come up with new industrial policies to match these dramatic technological transformations, which will push economies that fail to produce a sustainable response to these changes into further poverty.
Shrunken SA economy
In the new Trumpian era, sovereignty is about how strong a country’s economy is. South Africa’s economy has shrunk year after year because of ANC corruption, the collapse of the rule of law and the appointment of incompetent cadres, who have collapsed the public service, SOEs and infrastructure.
BEE state contracts granted to the politically connected have collapsed public services, while BEE requirements imposed on the private sector have contributed to many domestic and foreign private companies not making new investments.
Many technology companies are now vastly bigger than country economies — and more powerful than many small country economies. This is a new world, far removed from the ANC’s 1980s Cold War country friendships and factory-based economic strategies.
Russia’s invasion of Ukraine has ushered in the modern era of countries with might invading other countries. Trump has built on that. It is likely that in this new world, the US, China and Russia will allow each other to carve out spheres of influence.
China may just use the space that Russia’s invasion of Ukraine, and now Trump’s takeover of Venezuela, have created to invade Taiwan, while North Korea will probably ramp up its harassment of South Korea. This is the new world order.
Russia is in no economic state to provide any help to SA, while locking the SA economy into that of China’s as a strategy to diversify away from the US would amount to economic suicide.
As can be seen, in this new global order, SA will ultimately stand alone if the US takes it on. When Maduro was captured, “allies” of Venezuela muttered mild criticisms but did nothing, not wanting to jeopardise their countries’ economic interests by falling out with Trump.
Russia is in no economic state to provide any help to SA, while locking the SA economy into that of China’s as a strategy to diversify away from the US would amount to economic suicide. South African companies, struggling with state failure, collapsing infrastructure, power outages, systemic corruption and the ANC government’s anti-business stance, are uncompetitive in other markets.
It is critical that the ANC end its approach of forcing its party policies, including foreign policy, on the country as if it is still the majority party and not part of a national coalition that demands inclusive coalition policies. The government of national unity (GNU) must adopt new foreign policies and make new appointments, not ANC party deployment appointments, to negotiate with the US.
Some of Trump’s demands for SA policy change concern populist ANC policies that were, in any event, controversial and opposed in South Africa and are anti-growth, anti-employment and anti-business, even without Trump having to say that.
The policy of expropriation without compensation is a good example of populism playing to the online crowd. It undermines property rights, including shares, intellectual property and investments. Even China has a problem with it, as it threatens Chinese investments too.
Even worse, the expropriation law is likely to be unconstitutional. Expropriation is not necessary for economic growth, tackling corruption, getting the state to work, coming up with a rational industrial policy or getting the education system to work.
Policing hate speech by populist politicians, whether from the ANC, EFF or MK party, is a constitutional imperative for South Africa’s stability, while making rural crime a priority for police and prosecutors is a no-brainer. The current model of BEE, which enriches only a small politically connected elite, must change.
Changing BEE to make provision for alternatives to ownership would be an economic growth imperative even absent criticism from Musk or Trump. The ANC must put together a negotiating team to meet the Trump administration; one that involves non-ANC GNU members, non-ANC business, and non-ANC civil society.
Business leaders who are already trading with the US should be at the head of such negotiations. AfriForum and South Africans who are in the Trump inner circle in the negotiations should also be included.
Unless South Africa negotiates a compromise deal with the US, the Trump administration is likely to sooner or later unleash its full arsenal of high tariffs and individual sanctions on ANC members and related companies, and enforce the global economic isolation of South Africa by punishing countries that engage with ANC-aligned individuals and entities.
• Gumede is associate professor at the Wits University School of Governance and author of “South Africa in Brics”.
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