Understand the rules before you play this game

By R.W. Johnson

Ronald Lamola, South Africa’s foreign minister, has told the G20 that “Africa’s development must remain front and centre this year and into the future. The world cannot stand by and watch as debt-service costs crowd out development for a generation.” This is, of course, in line with Cyril Ramaphosa’s attempt to make the question of Africa’s debt the main concern of the G20 this year.

Several points should be made here. The first is that the ratings agency Standard and Poor reckons that the key warning sign that a country is on the verge of defaulting on its debt is when its payment of debt interest reaches 20% of national revenue. Currently the following African countries have reached or surpassed this point: Egypt (where debt interest consumes 49% of national revenue), Nigeria (35%), Ghana (34%), Malawi (33%), Kenya (32%), Zambia (26%), Angola and Uganda (each 23%) and South Africa (20% and rising).

So the first thing to notice is that Ramaphosa was not without self-interest: South Africa, on S&P’s criterion, is now on the cusp of default. It is worth noting that virtually all the countries ahead of South Africa in this sad queue are already involved in IMF programmes of one kind or another.

A second point is that the biggest bilateral lender to Africa is China, but we have only very incomplete information as to how much Chinese debt African states are carrying since these are often treated as private deals. But all indications are that Beijing has pulled back considerably from offering further loans – for warning lights are flashing.

African leaders, a choir organised by Ramaphosa, arrived at the first G20 meeting to call for comprehensive debt relief including complete debt restructuring involving all creditors, private, bilateral and multilateral. Normally that would mean some debt forgiveness, the stretching out of the length of some loans and lowering the rate of interest charged on them. Thus such a deal generally means that the creditors have to take a loss, though the borrowers typically run up their debts again pretty quickly.

Finally, there has been a particular effort to argue that Africa is being over-charged by high interest rates – the so-called “Africa premium”. The problem about this is that Africa is indeed risky. Apart from the various wars going on in Africa, almost all African states are notoriously corrupt, and even while the G20 discussions were ongoing, word came in of the alleged capture by a criminal mafia of police and justice institutions in South Africa. Word was also received that Yoweri Museveni (aged 80) has announced that he will run again in 2026 for the Ugandan presidency, although he will then have already served forty years as president.

However, even that news was eclipsed by word that Paul Biya of Cameroun (aged 92) has declared he will run for an eighth presidential term, having already served for 43 years. No other part of the world repeatedly serves up such grotesquerie. It’s amazing to note that although Cameroun became independent on 1 January 1960 Biya is still only its second president.

The problem about news items like this is that they convince many bankers that Africa is a sort of Mickey Mouse place where anything goes. And if you are going to take your chances with a Disneyland inhabited by cartoon characters like Museveni and Biya or, previously, Idi Amin and the “Emperor” Bokassa, you at least want high interest rates.

One thing one can be tolerably sure of is that even if Donald Trump decides to attend the G20 hand-over meeting in Johannesburg in November – a most unlikely event – there is no way that he will agree that African debt-service costs are the world’s No.1 problem. It is doubtful, indeed, that he has ever given it as much as twenty seconds’ thought. He would doubtless regard the US super-power competition with China as incomparably the top problem.

It’s true that the British and Europeans have made some show of sympathy over Africa’s debt problems, but that is partly because they are the ex-colonial powers in Africa’s case and partly to show that they are rather more humane than Trump. In practice, they regard the Russian war with Ukraine as far more important, together with the need to cut domestic social expenditure to pay for defence against the Russian threat.

Meanwhile a number of Caribbean island-states have worked themselves up into a quite a lather over their demands for reparations for slavery. They are demanding impossibly large sums from Britain, France, Spain, Portugal and elsewhere and they have had some success in enlisting African support. Among the curious omissions in their case is any recognition that slavery is one of mankind’s oldest institutions of which the Atlantic slave trade was but one example.

Moreover, the Muslim slave trade in Africa is not only far older than the European variety but slavery continues to this day in parts of Muslim Africa. In any case the European states have all decided to ignore the demand for reparations: the sums demanded are impossibly huge and the Atlantic slave trade ended over two centuries ago. Their refusal will produce some heat but little light.

Meanwhile the nations of the Indo-Pacific region are on high alert over the possibility that China may attempt to invade Taiwan in the near future, a conflict which could draw them all in and which could produce a nuclear collision between the US and China. Xi Jin-ping’s absence from a number of important meetings (including the BRICS summit) has been widely interpreted as a sign of conflict and uncertainty within the Chinese leadership over this all-important topic. Already the US has been canvassing potential allies like Australia, demanding to know whether, in the event of a Taiwan invasion, they will commit themselves in advance to fight alongside America (but they won’t say).

This, then, is the reality of a multi-polar world which Ramaphosa is so keen to welcome – with many different issues, most of them regionally based, competing for attention. Note that I have only mentioned some of the most prominent. In Scandinavia, attention is fastened on Trump’s attempted grab of Greenland, while, io Latin America, attention fixes on the rapprochement between Argentina and the UK over the Falkland Islands, Venezuela’s attempted grab of Guyana’s oil, and Lula’s dealings with Bolsonaro. The Middle East is still dominated by the implications of Israel’s rise to dominance and Iran’s eclipse.

In practice, the issues that win out are those involving the Great Powers, particularly where there is a risk of nuclear confrontation. And, as the old saying has it, “the Great Powers all behave like gangsters, and the smaller, weaker powers all behave like prostitutes”.

As yet, Ramaphosa doesn’t seem to have understood the new situation. He has responded to Trump’s imposition of 30+10% tariffs on South Africa by criticising it as “a unilateral” act and saying it is “not based on accurate data”. He has also criticised Trump for failing to appreciate that our new multipolar world has seen the emergence of a number of new medium powers, the implication being that he ought to give them greater respect.

In fact, as I have argued before, South Africa’s best interests were served by the old US-led liberal Bretton Woods order. If that was still working, then all trade and tariffs would be regulated and adjudicated by the World Trade Organisation. In which case our sudden new tariffs could not have happened. But in effect Trump has completely ignored the WTO – which may now be destined for the scrap heap – and, indeed, he is questioning how far America’s interests are served by belonging to any international organisation. He has already left the World Health Organisation and the Paris Agreement (i.e. the world climate change treaty).

Trump has also pulled back on American supports to various international bodies – abolishing PEPFAR and the generous international health donations channelled through the US National Institutes of Health, as well as America’s funding for the African Development Bank. The whole name of the game for Trump is that he relishes the US freedom to take unilateral action – and the point of the old rules-based order was precisely to restrain or prevent such unilateral action. Trump has also completely ignored AGOA and, by driving a coach and horses through it, has effectively destroyed it without ever bothering to repeal it.

Ramaphosa does not seem to understand that this unilateral American behaviour is precisely the result of the new multipolarity, and that Trump simply doesn’t care about the affronts he gives to lesser powers. The old rules-based order has enabled such lesser powers to cultivate a certain pride and self-regard about their national sovereignty because in international law all states are equal, but in effect multipolarity threatens the very existence of international law.

We have already seen the UN Convention on the Law of the Sea (UNCLOS) hold that China’s claims to the whole of the South China Sea are impermissible – but China has simply rejected the verdict and gone ahead by imposing its maritime control through its ever-growing fleet of armed naval vessels. Might is right, in other words. Only a few Great Powers with powerful navies have dared to challenge Beijing by sailing their ships through “China’s sea”. The countries whose territorial waters Beijing is invading, such as Vietnam and the Philippines, don’t dare do such a thing.

In effect Ramaphosa’s decision to use the G20 to try to exert pressure on rich countries to come to the rescue of over-indebted African states was an attempt to play by the old rules of the game – while simultaneously championing the rise of multipolarity. This effort has come completely unstuck as the world’s most powerful state, the US, has simply boycotted proceedings (neither the Fed chairman of the Treasury Secretary attended the Zimbali meeting) and meanwhile imposed draconian new tariffs which will considerably worsen the plight of African economies.

The result has not been any serious push-back against the US, but instead it has raised questions about the viability of the G20 itself. To Pretoria’s horror, its chairmanship of the G20 could be turning into a wake for the G20. The US is supposed to take over from South Africa as chairman of the organisation, but will it even bother to do so ? If it neglects to do so, the organisation will surely lapse.

Meanwhile the revelation that Ramaphosa’s envoy to the US, Mcebisi Jonas, has actually been denied a US diplomatic visa and cannot gain access to Administration circles in Washington further weakens Pretoria’s position. In effect the government has refused to learn any lessons from Washington’s rejection of Ebrahim Rasool as its ambassador. So it replaced Rasool – a deployed ANC cadre with a record of public hostility to Trump – with another deployed cadre with the same anti-Trump record.

Worse, it appears that Pretoria has been publicly insisting that all is fine with Jonas despite this rejection, apparently just to avoid the embarrassment of having to admit to its repeated failure. Meanwhile South Africa has been without proper representation in Washington since March – but diplomatic missions from South Africa’s Opposition parties come and go to Washington where they are clearly treated as more authentic and with greater courtesy than the government’s own representatives.

This is not a tenable situation. In effect Ramaphosa’s mission to Washington has achieved nothing and he remains at the foot of the mountain, without friends, without leverage and, indeed, without dignity. Such is the denouement that ANC foreign policy has produced. This situation is the direct result of Naledi Pandor’s disastrous term as foreign minister. She was a foolish and ideologically driven woman, and yet the Ramaphosa government accepted both her unwise anti-Israel and anti-American policies and her preaching of the virtues of multipolarity.

In general, of course, the standard of ANC ministers is abysmally low, but the damage they do is contained if they deal only with domestic issues. A foreign minister, however, has to deal with the real international world and with other countries’ far more expert ministers and officials. So in choosing a foreign minister South Africa needs to put up the very best that it’s got.

It seems clear that nothing can be achieved without the repudiation of at least some of Pandor’s policies. But Ramaphosa needs to start by understanding the game he is in and how its rules have changed. To date he has been cheering on those changes without realising that they have undermined his own position.

FEATURED IMAGE: President Cyril Ramaphosa at a G20 leaders summit … handing over the chairmanship to the US might turn into a disaster. (GCIS on Flickr)