If Nigeria and Ghana start a trade war with South Africa like some of their gov officials are now starting to talk about that possible option, who will lose more?
First let’s look at the exchanged goods. Both Nigeria and Ghana sell crude oil to South Africa, which South Africa can replace with Angola, UAE and even Russia. The price change of fuel will not be noticeable. We buy crude from them because it’s convenient. Not because it’s a must.
Now let’s look at what would happen to them. First of all, all their telecommunications infrastructure and banking are South African. Shutting those down would cause immediate chaos.
Secondly, they buy industrial machinery from us. I know you think they can just buy in China. Nope! Because they are using our banks, and their currencies are too low on strength, trying to buy from China using Dollars or Yuan will finish their reserves.
How? Because SA trades and work with these countries, it can accept their weaker currencies. Also because of the new Pan African payment system called PAPSS, which uses local African currencies, these guys do not have to sell their Dollar reserves and use them for day to day trade. Because if they were to buy the same goods from a non African country, they would have to sell their dollar savings because the dollar is strong and then buy day to day goods. And when they don’t have dollars their currencies can be attacked.
When Forex traders know that a country’s currency is on its knees and they don’t have external dollars to buy it back in case of an emergency, they will short it and profit from your collapse. So it’s a must for countries to hold external currencies for emergencies. So South Africa protects these countries in a way because it can be a buffer that helps them get goods without using their security reserves.
Not to mention transport costs importing from Beijing won’t be as cheap as importing from Durban. Transporting machines is more sophisticated and expensive than transporting oil. And if they decide, they are going for a non African option anyway, they may find that overseas nations will dominate their industries in a way that South Africa can’t. Because South Africa uses their local economic participation and integration.
So if a misguided trade war were to be started by these 2 nations, it would be the most suicidal thing we have ever witnessed in the history of trade wars. It would be extremely unwise for these guys to start something like that. Literally their economies would plunge to Zimbabwean levels in the 2000s. Do not worry about these diplomats and “experts” on social media. They do not understand the real situation.
You South Africans, continue holding your leaders accountable and make them implement your laws without fear. Le ska tshaba. South Africa is the protector of these countries.
I was once young, hopeful, stupid and slightly confused 😭😭
There was a time I genuinely thought Julius Malema was capable of being President and leading the country.
Life comes at you fast😭
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