Economists say the US ambassador Ruben Brigety claims of South Africa’s “arming” of Russia could have an impact on the Namibian economy.
On Thursdaythe South African rand and Namibia dollar crashed to their previous record low, losing more than 30 cents of their value against the US dollar in minutes after Brigety the US ambassador to South Africa accused South Africa of providing weapons and ammunition to Russia.
Ambassador Brigety said at a press conference on last week that South Africa had loaded weapons and ammunition on to a Russian vessel, which is under sanctions, at the Simon’s Town naval base near Cape Town in December last year. The arms were reportedly then transported to Russia.
FNB Namibia Economist Ruusa Nandago said this could have an impact on inflation, particularly on commodities sensitive to exchange fluctuations.
“Namibia operates under a peg exchange rate with South Africa, which means one South African rand is equal to one Namibian dollar. It also means that any movement in the South African rand will result in the same movements in the Namibian dollar by the same magnitude,” Nandago said.
She said given the recent blow out in the rand, this could have implications on economic activity in Namibia.
However, she stated that this will only happen if the blowout lasts a long time.
“Only if this blowout persist for an extended period. The first impact it could have is on inflation especially of those items that are sensitive to exchange rates, if we think about for example our fuel prices,” she said.
At present, Namibia purchases its fuel in US dollars from countries such as India, United Arab Emirates and South Africa.
Abednego Ekandjo, the petroleum economist in the Mines and Energy Ministry last month toldThe Villager that if Namibia signs agreements with central banks of oil producing countries, it can make it possible for the country to purchase oil in its local currency.
This was after Kenya signed deals with Saudi Arabia and the UAE to buy oil with its local currency, Kenyan Shilling, instead of US dollars.
However, Bank of Namibia’s Director of Strategic Communications and International Relations, Kazembire Zemburuka during the same time said it is not possible for Namibia to purchase oil in its local currency.
Zemburuka stated that predominantly 90% or 100% of all transactions when it comes to oil is done in US dollars.
Speaking to The Villager on what weight the accusations by Brigety against South Africa could have on Namibia, international relations analyst Marius Kudumo said there are international instruments that will guide in terms of how states are supposed to conduct their business.
“If it is confirmed that South Africa has provided weapons to a country that is involved in a war that might have implications on the reputation of South Africa,” Kudumo said.
He said South Africa has been consistent regarding the Ukraine-Russia war.
Russia invaded areas of Ukraine on 24 February last year in a major escalation of the Russia-Ukrainian war that resulted in tens of thousands of dead on both sides.
“South Africa maintained that there is a need for negotiation and diplomatic solution,” he stressed.
Kudumo said if South Africa was providing weapons to Russia while at the same time advocating for peaceful solutions then there are contradictions.
“Those contradictions can be exploited to make South Africa not to appear good in international engagements because trust is important in the inter-state relations,” he explained.
Kudumo said these developments would not affect how Namibia conducts itself with other states, adding that each state has interests that they advance.
Brigety’s allegations drew a strong reaction from EFF leader Julius Malema claiming that his accusations are misplaced and unsubstantiated.
“Americans’ concerns are misplaced. The current government has got no capacity to empower Russians with weapons against their own handlers,” Malema is quoted to have said.
Meanwhile, the South African governmentstated that it is looking into the accusations.
Simultaneously, South Africa’s foreign ministry summoned the US Ambassador over allegation.