Johannesburg - The ANC has given its clearest indication yet that the battle with the US over the highly contested Private Security Industry Regulation Amendment Bill could push the country away from traditional international financial institutions to the Brics bank.
ANC leaders yesterday made it clear that the US demand that the government amend certain aspects of the bill were unreasonable and that there was likely not to be any compromise on the matter.
Earlier this year, the Security Industry Association of America blasted the security law requiring foreign-owned security companies to sell at least 51 percent of their businesses to locals.
ANC secretary general Gwede Mantashe told reporters ahead of the start of the party’s national general council (NGC) that South Africa would not be taking instructions from the US and that threats to withdraw support for South Africa’s funding applications would then alternatively be channelled through the Brics bank or what is now know as the New Development Bank.
“The motivation for the movement towards the Brics bank is that we do not get detained by the impressions of other countries,” Mantashe said. “We have to look after our interests and defend them where necessary,” the ANC secretary general added.
In an unprecedented move, the ANC snubbed US and Western diplomats, including representatives of the EU, which is South Africa’s major trading partner, and instead invited representatives from Brazil, Russia, India and China to attend the NGC.
The security bill and the differences over meat imports have resulted in South Africa getting conditional access to the US Africa Growth and Opportunity Act (Agoa), through an out-of-cycle review, which is invoked to monitor and review the eligibility of beneficiary countries.
The hardening attitudes between the two countries could result in the exclusion of South Africa from Agoa.
Agoa was signed in 2000. South Africa has exported significant quantities of manufactured goods to the US, including about 60 000 vehicles a year, and last year it helped to turn a trade deficit with the US into a trade surplus of about R12 billion.
The ANC head of the economic transformation committee, Enoch Godongwana, said the attraction of the Brics bank was based purely on South Africa’s economic needs.
Godongwana said while South Africa would still keep the negotiations continuing, it would explore other avenues of raising funds if the security bill issue was used as a condition for South Africa to get full access to Agoa.
“To the extent that we are partners of the Brics bank from its constitution to its formation and its terms, we think that we share common interests,” said Godongwana.
This week, the US trade mission issued South Africa with a clear directive to either consider its demands over the bill or risk being sidelined for project funding by the International Monetary Fund and the World Bank.
Security Industry Alliance, which is spearheading the lobbying against the cession of the 51 percent stake of foreign-owned security firms to locals, said failure to do so would result in the withdrawal of US support for South Africa’s funding applications for infrastructure development projects.
The alliance’s executive director Costa Diavastos said US trade officials had given an undertaking that they would revoke their support for South Africa’s loans if the amendment came through.
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