The ANC’s squib game

17 June 2025 — Will the National Dialogue prove to be just another talk shop? Can the Bomb Squad fix Joburg? Will South Africa be removed from the greylist in October? Why did Israel strike Iran? How is China working to replace AGOA?

The ANC’s squib game

The African National Congress (ANC) launched its 2026 election campaign on 10 June 2025, when President Cyril Ramaphosa, in his capacity as head of state, announced the start of a so-called National Dialogue — without bothering to involve any of his coalition partners in the Government of National Unity. The entire exercise has the appearance of an ANC public relations campaign, as an under-pressure president and his party seek to legitimise their policy objectives under the pretence of society-wide engagement.

The National Dialogue is to kick off with an agenda-setting National Convention scheduled for 15 August, with a second National Convention to be held early in 2026. The preparatory committee believes the exercise will cost over R700 million, mainly aimed at paying for “community engagements” throughout the country at which participants are expected to discuss the challenges faced by ordinary South Africans — many of which were caused by the ANC itself. That input is then meant to be translated into an action plan that will likely endorse key ANC policies such as expropriation without compensation, the National Health Insurance, and race-based laws.

Mr Ramaphosa’s announcement of the National Dialogue showed him in his element as he used his favourite buzzwords, including “broad agreement”, “people-led, society-wide process”, “to come together”, “shared vision”, and “new social compact”. He also announced an eminent persons group, an inter-ministerial committee, a steering committee, and a secretariat which will be housed at the National Economic Development and Labour Council.

Our call is that the entire process will be much talk and little action. The purpose of the exercise is to present Mr Ramaphosa — the ANC’s strongest electoral asset — at his most statesmanlike, while positioning the ANC as the very embodiment of the nation. But given the decline in the ANC’s stature and electoral support, as well as the worsening socio-economic outcomes after 30 years of ANC dominance, it will be a lot harder to sell sceptical South Africans on this message than it would have been 15 years ago.

Joburg manoeuvres begin

The ANC mayor of Johannesburg, Dada Morero, last week announced the members of the so-called Bomb Squad, a specialised unit dedicated to fighting crime and improving service delivery in the city. The group includes no fewer than three former city managers, a former chief operating officer and a former chief financial officer who together are meant to get the city to do the things that its roughly 40,000 employees have not been able to.

Our call is that the group will achieve some minor superficial improvements in parts of the city likely to be seen by attendees of the G20 summit in November but will fail to change the city’s disturbing downward trajectory — which is what Johannesburg voters will be looking for when casting their ballots in the next local government elections.

From the Democratic Alliance’s side, Helen Zille — current chairperson of the party’s federal council and a feisty and highly effective former mayor of Cape Town — is said to be considering standing as a candidate for the Johannesburg mayorship. If she does, the race for Johannesburg could be one of the most fiercely contested in South Africa between Mr Morero and his bomb squad, Ms Zille, perhaps ActionSA’s Herman Mashaba out for revenge, and an uMkhonto weSizwe Party hungry to rip into ANC support.

FATF greylist exit in October?

Since February 2023, South Africa has been on the greylist of the Financial Action Task Force (FATF) because of weaknesses in its ability to counter money laundering and terrorist financing. This affected South Africa’s access to international financial markets and made cross-border transactions more difficult.

However, now South Africa appears to have “substantially completed” all 22 action items required for removal from the greylist, according to an initial determination by the FATF plenary last week. The organisation will now conduct an on-site inspection to verify the reported progress. If confirmed, the FATF will delist South Africa at its next Plenary in October 2025, according to the National Treasury.

Israel strikes Iran

In the next phase of the reshaping of the Middle East, Israel struck targets in Iran in the early hours of 13 June, killing high-ranking military personnel and nuclear scientists, and damaging Iranian government facilities. Since then, there have been Iranian missile attacks on Israel, as well as further Israeli attacks on military targets in Iran.

The nominal reasons for Israel’s attack include Iran’s growing nuclear capacity and associated fears that the country will soon have nuclear weapons. Iran’s Supreme Leader, Ayatollah Ali Khamenei, vowed to “destroy” Israel, not for the first time. In addition, the destruction of Hezbollah’s missile arsenal and the degradation of Hamas’s offensive capabilities dampened Iran’s ability to threaten retaliation through these proxies and created a window for Israel to act.

Israel’s urgency to act was heightened by Israeli fears of being “sold out” by a United States (US) deal with Iran, following from a US deal with the Houthis in Yemen, where the US got the Houthis to agree to stop attacking shipping but did not bar the group from attacking Israel. Because Israel can operate with close to full impunity over Iran, it will likely continue with strikes over the coming weeks to further weaken Iran’s ability to threaten Israel.

Crude oil futures jumped by over 7% on Friday, settling at around $74 per barrel of Brent crude. Iran produces over 3.3 million barrels of oil per day and exercises strategic control over the Strait of Hormuz, through which 21% of global oil supplies move. Disruptions in Iranian production or in shipping through the Strait would constrict supply, pushing prices up. Fears that the military conflict could develop into a larger, longer war can further unsettle markets and could drive them into a risk-off phase.

China replaces AGOA

Amidst the US-generated trade turmoil, Chinese president Xi Jinping announced last week that “zero-tariff treatment for 100% tariff lines” would be accorded to all 53 African nations that have diplomatic ties with China. This will provide those African countries with tariff-free access to Chinese markets, much along the lines of the duty-free access to the US market which the Africa Growth and Opportunity Act (AGOA) offers 32 African countries for over 1,800 products.

With the current iteration of AGOA set to expire in September, and few signs that it will be renewed, African governments will be especially interested in new tariff-free trade agreements. Many African countries will be additionally incentivised to seek trade with China because they face high reciprocal US tariffs that were announced earlier this year. Those tariffs are set to be reactivated on 9 July. From that date, South Africa faces a 31% tariff rate on its exports to the US.

China is not pursuing this trade option for purely altruistic reasons. It is seeking to increase its trade with countries around the world to help alleviate some of its ongoing domestic growth headaches, secure access to raw materials, and increase Chinese soft power at a time many countries feel the US is generating geopolitical shocks and uncertainty.

Through late 2024 and into 2025, the Chinese government has worked to portray itself as the defender of a rules-based global system, advocating for free trade; in November 2024 Mr Jinping said: “We should tear down the walls impeding the flow of trade, investment, technology and services, uphold stable and smooth industrial and supply chains, and promote economic circulation in the region and the world.”

However, whether a tariff-free agreement is meaningful for South African exports hinges on the details. While China is South Africa’s top export trading partner, this trade has been composed mostly of raw materials and commodities. This is also true for many other African countries. While these countries are anxious to export other products, they face significant non-tariff trade barriers when it comes to exporting agricultural products into China and are generally uncompetitive with Chinese industry when it comes to manufactured products.

Any new trading agreement, while welcome, will not cure South Africa’s domestic trade infrastructure and policy impediments and failures. Reform of the country’s ports and railway network, as well as a steady move away from protectionist, subsidies-first trade policy, will ensure a more conducive domestic manufacturing environment and allow South Africa to be less dependent on and desperate for the beneficence of larger countries.