06
May
Three years after international sanctions on Iran halted its energy ties with South Africa, both countries are looking to restart the trade deals that made the latter the former’s largest trading partner in Africa. The Islamic republic’s Shana news agency reported on Saturday that both countries are working on a framework of cooperation for the supply of Iranian crude, gas and petrochemical products to the southern African country.
South Africa last bought crude from Iran in May 2012, when it imported around 68,000 barrels per day (bpd). Since then both countries have found it hard to do business because of the US-led international sanctions on Iran for allegations of weapon intent of the state’s nuclear program, a charge the country vehemently denies. The measures have hit demand in South Africa, the continent’s second-largest crude consumer, and caused more than a 50 percent drop in Iran’s crude exports. Iran is now negotiating with the US and other world powers to lift its sanctions in exchange for a close monitoring of its nuclear programme.
South Africa and Iran have a historical and bilateral relationship which pre-dates both the emancipation of blacks in South Africa and the Islamic revolution in Iran. However, the relationships have been largely dictated by both events. The apartheid regime in the southern African country held strong business and political ties with the Iranian government under the Pahlavi dynasty from the 1930s onwards. The overthrow of the Pahlavi dynasty in 1979 by the Islamic Revolution severed ties between both governments, and saw the new Iranian regime switch support to Nelson Mandela’s anti-apartheid campaign. Both countries re-established bilateral cooperation after the end of apartheid in 1994, and South Africa went on to become Iran’s largest trading partner in Africa.
Several South African companies have heavily invested in the Iranian market, among them is the MTN Group which has a 49 percent stake in the state owned Irancell. South African exports to Iran stood at $1.5 billion in 2007, while the Persian country made $20.8 billion from oil-dominated exports to former in the same year. But the international sanctions imposed on Iran by the world powers have caused several problems for the trade between both countries.
In 2012 the MTN Group protested its inability to gets its earnings in the Islamic country due to the freshly imposed US-led sanctions. The company was also heavily criticised for its activities in the Iranian telecoms sector. The US-based advocacy group United Against Nuclear Iran (UANI) launched a campaign in the same year calling for the South Africa to reduce its operations in Iran. The group accused MTN of enabling the Iranian government to track and locate cellphone users which it says is a violation of human rights. The Telecom giant vehemently denied the accusations. The sanctions and strong western criticism of those doing business with Iran cut off most of South Africa’s investment in the country and halted its importation of Iranian oil and gas.
The optimism of a resolution of Iran’s nuclear dispute ushered in a breath of fresh air into the South Africa-Iran relations. The MTN Group, last month, said it will be able to transfer about $1 billion in accumulated dividends and a loan repayment from its Iranian unit if the sanctions against Tehran are lifted.
On Sunday South Africa’s Energy Minister, Tina Joemat-Pettersson, said the relationships between Tehran and Pretoria is historic and “cannot be forgotten or wiped.” “We want to see that kind of relationship restored to its former glory,” Pettersson added in a visit to Tehran. The visit is expected to prepare both nations for extensive meetings between South Africa’s foreign minister and his Iranian counterpart.
Source: http://www.ventures-africa.com/archives/62404