Economic development

Cape sea route ‘key to US relations’

The potential use of South Africa’s Simon’s Town naval base by Russia or China was the biggest cause of tension between South Africa and the United States, according to analyst and former ambassador Dr Kingsley Makhubela.

Dr Makhubela pointed out the rising strategic importance of the Cape sea route because the Middle East conflict was diverting ships around the Cape.

He also said in one of his regular interviews with Moneyweb that the US might use its African Growth and Opportunity Act (AGOA) as a stick against South Africa, and it would probably exclude South Africa from AGOA’s benefits of duty-free access to US markets.

Dr Makhubela is a director of RiskRecon, a consultancy specialising in risk management, conflict resolution and economic and political analysis. He recently joined FairPlay as a strategic advisor.

Asked about the new sanctions imposed on unnamed South African officials, and a warning from the local US ambassador that “this is only the start” he said “it doesn’t make sense to attack South Africa in this manner and continue to provide these (AGOA) concessions.”

He noted that the US bought 73% of its platinum from South Africa, and large quantities of iron ore. These were still admitted into the US duty-free, because the US needed them.

However, he saw the potential use of the Simon’s Town naval base by Russia and China as the key issue between South Africa and the US. It was an issue that started before the Trump administration.

“I think for quite some time, the US has been eyeing this. You remember, the US has had an intention to set up military bases in South Africa, and South Africa rejected that.

“Given the geostrategic location of the Cape of Good Hope and the access to Asia and South America, even to navigate through Europe, it’s what is at stake.”

Dr Makhubela said South Africa’s “big mistake” was to believe the country’s tense relationship with the US was because of President Donald Trump.

“I don’t think it’s Donald Trump, it’s a systemic issue,” he said.