How Trump's decision on Iran could impact South Africa
Trump’s announcement stands to reduce the SA-Iran trade target of $8bn‚ including oil imports
The Iranian ambassador to South Africa said on Tuesday that he hoped US President Donald Trump’s decision to withdraw from the Iran nuclear deal would not affect the relationship between South Africa and Iran, but history shows this is likely.
Trump on Tuesday announced his decision to withdraw from the widely-praised deal‚ and also announced that the highest level of sanctions would be imposed on Iran. He added that any country which continued to support Iran also risked sanctions being imposed on them.
These pronouncements and decisions could have significant implications on trade plans between South Africa and Iran.
Previously‚ sanctions imposed on Iran by the US saw a big decline in trade between the countries. Oil sales were particularly hard hit. In 2004‚ according to StatsSA‚ South Africa bought 8-million tonnes of crude oil from Iran‚ and the country was the third-biggest exporter of oil to South Africa in 2011.
However‚ due to the US-imposed sanctions‚ this dropped to zero by the middle of 2013‚ and it has yet to pick up again.
In an interview in November last year‚ former finance minister — and now public enterprises minister — Pravin Gordhan said that the only thing holding back great business and trade opportunities between the two countries was Trump. He said that if Trump kept the nuclear deal intact Iran would be a much safer investment destination.
“But Iran is still grappling with Trump‚” said Gordhan. “Trump has introduced a lot of uncertainty. People would tend to be cautious in the event of old sanctions being reintroduced‚ or new ones coming into being. And as you know‚ businesses are risk-adverse. So until there is clarity‚ there will be some reservations about investing.”
However‚ Hameed Amouhadi‚ chairman of the South Africa Iran Trade Desk said that if the conditions were right — and if the nuclear deal stayed in place‚ the potential was huge.
“The aim is to hit‚ by 2025‚ $8bn in trade‚ including the crude [oil]‚” he said.
But with Trump’s announcement on Tuesday‚ it might make that ambitious goal a little harder to achieve.
However‚ Mohammad Faraji‚ Iran’s ambassador to South Africa‚ said he hoped the decision wouldn’t affect SA-Iran relations.
“This issue has a lot of dimensions. One dimension‚ the main one‚ is that Iran has a very good relationship with South Africa‚ like it does with lots of countries in the world‚ even has good cooperation with European countries‚ Asian countries‚ African countries.
“I don’t think it’s going to be any worse [after the decision] or something is going to change. We believe trade is trade‚ and that everything is still going to be on‚” he said.