Any US-Iran conflict could hit SA economy, experts warn

South Africa stands to lose out economically should the Iranians decide to escalate the impasse between itself and the United States, possibly sending crude oil prices sky-rocketing.

This according to experts, who have warned that while the killing of Iranian general Qasem Soleimani last week could increase the scourge of insurgency by Islamic extremists in Africa, the direct knock-on effect on South Africa was more likely to be a devastating economic downfall.

Institute of Security Studies chief executive officer Jakkie Cilliers said that at stake was more than just the financial interests South Africa had in both countries.

Should the Iranians take their retaliatory tactics to the Strait of Hormuz, blocking one of the world’s most strategically important choke points, South Africa, along with the rest of the world stood to fall economically.

“If you look at our interests, MTN has got significant interests in Iran and South Africa has historically received a lot of oil imports from Iran,” said Cilliers.

“South Africa would be keen to make sure oil prices don’t go up, because that will have an effect on our economy. There isn’t much that we can do unfortunately. We tend to think that we can play some kind of dramatic role in all of this, but it is far above our league and there is very little we can do. As the ANC has said, the US are now acting like terrorists and all of these crazy events are a ploy to get (President Donald) Trump re-elected.”

Several underlying factors were at play leading up to the current US-Iran tensions, suggested Cilliers. These included the military industrial complex behind US-Middle East conflict, Trump’s ambitions to win this year’s elections and his purported desire to deflect attention from his impeachment.

Echoing the concern for South Africa’s future economic stability, political analyst Andre Duvenhage also pointed out that Iran’s next move could further hike oil prices, with the potential of targeting the Strait of Hormuz.

“Without any doubt, we can then expect that petrol prices will go higher and that will be compounded by all the taxation on petrol already. We could see a scenario where crude oil is now $100,” said Duvenhage. “Already it has reached $70 and if it goes up again by $30 or $40, that would be devastating for our economy.

“Think of how this would affect Eskom which is running on emergency diesel support. This could threaten our ability to generate electricity.”

Implications would also depend on the choices of politicians and whether the demonstrations against America in Iran bolstered extremism in Africa.

“Islamic extremism is definitely becoming more prominent in parts of Southern Africa, not so much near South Africa where it is more limited compared to places like Somalia, Kenya, but there has been activity in the northern parts of Mozambique,” said Duvenhage.

Meanwhile, the DA is calling for quiet diplomacy, saying South Africa had too much to lose should it find itself taking sides.

– simnikiweh@citizen.co.za

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