The adage states, “If it does not involve you, it should not concern you,” however, South Africa adopted a contrasting viewpoint. On December 29, 2023, the South African government applied with the International Court of Justice (ICJ), accusing Israel of committing genocide in Gaza, a violation of the 1948 Genocide Convention, to which both countries are signatories.
The ICJ rendered a verdict in favour of South Africa on January 26, 2024, upholding the nation’s authority to take Israel to court, even without direct involvement in the conflict. The ICJ mandated that Israel promptly implement provisional measures to prevent further acts of genocide in Gaza.
South Africa’s application and the subsequent verdict have caused embarrassment not only to Israel but also to other nations that supported them in the conflict, such as the USA, Germany, and the UK. Despite the heroism of South Africa, the verdict has put the country in a precarious situation, particularly regarding its economic ties with Israel, with whom it conducts trade amounting to approximately $456.5 million annually. Furthermore, other nations aligning with Israel may also consider cutting economic ties with South Africa, which could incur significant costs for the nation, given that these countries collectively engage in around $46.5 billion in trade.
The stance by South Africa poses a risk of upsetting significant trading allies, potentially prompting them to take retaliatory measures. In this short piece, we seek to explore the trade repercussions arising from South Africa’s decision to bring the state of Israel to court.
Trade Between South Africa and Israel
South Africa and Israel have a significant trade relationship, with bilateral trade reaching substantial figures in recent years. Major exports from South Africa to Israel include minerals, agriculture products, and machinery, while Israel exports pharmaceuticals, technology, and agricultural goods to South Africa. South Africa exports approximately 39.5% of coal briquettes and 30.35% of diamonds while Israel exports 7.6% of tool plates and scrap copper. See the figure below.
Exports and Imports Between South Africa and Israel. Source: The Observatory of Economic Complexity (OEC).
Trade between the two nations saw a notable increase over the years. From $387.8 million in 1992 to $474.7 million in 1994, it surged to $706.4 million in 2000. By 2010, the trade volume had risen to $1.03 billion, positioning Israel as South Africa’s 40th largest import source and the 24th largest export destination. South Africa held the status of Israel’s primary trading partner in Africa from 2006 to 2016. Although reaching a peak of $1.19 billion in 2012, bilateral trade started to decline due to South Africa’s stance in the conflict.
In 2021, Israel exported $241 million worth of goods to South Africa. Over the past 26 years, Israel’s exports to South Africa have experienced an annualized growth rate of 0.25%, rising from $226 million in 1995 to $241 million in 2021. Nevertheless, as per the United Nations, South Africa has experienced a notable decrease in exports to Israel over the past year. In 2023, for instance, South Africa’s exports to Israel amounted to approximately S$212.65 million. Figure 2 below clearly illustrates the substantial decline in South Africa’s exports to Israel since 2012.
South Africa’s exports to Israel. Source: United Nations.
Potential losses for South Africa resulting from taking Israel to the ICJ
According to Charles Edison, “Economics, politics, and personalities are often inseparable”. Thus, it was inevitable that the diplomatic backlash between South Africa and Israel would impact trade between the two countries. Analyzing the trade value between the two nations indicates that if Israel decides to cut economic ties, South Africa could encounter a trade value loss of around $456.5 million, potentially causing substantial harm to its economy.
Moreover, if other developed nations supporting Israel’s stance also choose to terminate relations, the potential loss for South Africa could be around $46.67 billion, equivalent to R876.37 billion (Refer to Table 1). The repercussions would be far more severe if these industrialized nations decide to sever economic relations, with a particular emphasis on the United States, which stands as South Africa’s primary trading partner. This holds significant importance, given that South Africa is currently enjoying the benefits afforded by the AGOA agreement.
An additional noteworthy trade alliance exists between South Africa and Germany, marked by a longstanding history of bilateral cooperation. Germany holds the position of South Africa’s second-largest supplier, trailing only behind China, and stands as the third-largest consumer country. Reciprocally, South Africa plays a crucial role as a trading partner for Germany, securing the 11th position among the most significant international partners, following India and Brazil.
The UK also plays a significant role in the South African economy. For instance, the UK exported £137 million and imported £431 million from South Africa. In November 2023, the primary exports from the UK to South Africa included Cars, Low-voltage Protection Equipment, Diamonds, Hard Liquor, and Valves. During the same period, the top imports by the UK from South Africa comprised Platinum, Delivery Trucks, Gold, Precious Metal Scraps, and Grapes.
Trade value of countries against SA decision. Source: Daily Investor
In conclusion, the anticipated decision by South Africa to bring Israel before the ICJ is poised to yield significant repercussions. A notable deterioration in trade relations between the two countries is foreseen, spurred by increasing pressure from the public for South Africa to enforce a comprehensive boycott of Israeli goods and services. We anticipate a substantial decline in bilateral trade, possibly reaching double digits by the end of the year.
Regarding the likelihood of other countries backing Israel’s decision to cut ties with South Africa, the outcome remains uncertain. However, we are confident that consequences, whether economic or political, will emerge in the long run. Possible retaliatory actions by these nations could redirect attention to South Africa’s internal politics, affecting electoral results and potentially influencing the agenda for regime change.
