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Dec 18, 2012 | 16:56 GMT

South Africa's Checkbook Diplomacy

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Despite possessing the largest economy in sub-Saharan Africa, South Africa lacks the international influence of a country that views itself as a continental leader. Pretoria has begun trying to enhance its influence through a new approach: checkbook diplomacy. South Africa is deploying capital across multiple countries in the region. On Nov. 30, for example, state-controlled energy and chemical company Sasol opened a $250 million natural gas-fired power plant project in Mozambique. On Oct. 17, South Africa's upstream oil producer, PetroSA, announced the purchase of a stake in Ghana's Jubilee oil field. South African companies are investing more than $500 million in Nigeria, acquiring on Nov. 28 stakes in a telecommunications company and, on Oct. 5, stakes in agriculture and food services. South Africa is also disbursing a $300 million loan to help underwrite the budget of the neighboring Swaziland. Moreover, state-owned rail and port operator Transnet announced Nov. 20 that it would rehabilitate a rail network linking South Africa to the Democratic Republic of the Congo. Working with governments in Zimbabwe, Zambia and Congo, Transnet aims to improve supply chain efficiencies that move mining commodities throughout South Africa and Central Africa's Copperbelt region. Pretoria's involvement in this project is no surprise; South Africa's rival for regional leadership, Angola, is also working to rehabilitate a railway to the same mineral-rich region. If completed, Angola's Benguela railway would undermine South Africa's ability to oversee the movement of commodities and finance into Central Africa, a region Pretoria has always viewed as its rightful territory. Though South Africa has struggled to live up to its expectations for international clout to this point, the country is ready to pursue economic ventures aimed at enhancing its influence abroad.

South Africa's Checkbook Diplomacy
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