South Africa’s banking industry faces a “profound geopolitical risk” from the government’s close ties with Russia, according to the head of Africa’s biggest lender by market value.
South Africa has drawn criticism from some of its biggest trading partners, including the US and the European Union, over military exercises it conducted with Russian and Chinese forces last month. Those countries have also censured President Cyril Ramaphosa’s administration over its abstention from United Nations resolutions condemning Russia’s war with Ukraine.
“Our government’s left-leaning enthusiasm for China and Russia is being noticed by countries vehemently opposed” to the war in Ukraine, FirstRand CEO Alan Pullinger said at an investor briefing Thursday in Johannesburg. The government’s indifference to the war and its friendship with Russia is “foolhardy in the extreme,” he said.
South Africa’s banking industry is dependent on access to international markets, global clearing and settlement, Pullinger said. The country risks consequences because of its stance on Russia, he said.
“Our collective access is a privilege; it is not a right and it can be revoked with ease,” Pullinger said. “FirstRand does not share our government’s enthusiasm for Russia.”