The Democratic Alliance (DA) strongly condemns any potential financial collaboration between the Development Bank of Southern Africa (DBSA) and the Russian state-owned bank VEB.RF, an entity whose dubious conduct has resulted in sanctions which preceded Russia’s latest illegal war in Ukraine.

Reports of an agreement between South Africa and VEB.RF, as announced by the State owned Russian News Agency, are deeply concerning. Even though the DBSA has seemingly denied signing any credit line deal in a lengthy lawyerspeak statement, this situation raises several questions.

What was the rationale for engaging with VEB.RF in the first place? This engagement takes place at a time when the world, including key international partners, stand united in sanctioning Russia’s war machine.

Any association with sanctioned entities, especially those that may directly or indirectly fund the conflict undermines the South African government’s questionable neutrality position.

Having its employees plead guilty to espionage in
the US, the Russian state bank VEB.RF is widely known to employ Russian spies abroad. Even if there is no deal or any discussions of a deal with VEB.RF, this situation illustrates the reputational and counterparty reliability risks South Africa faces when engaging with dodgy actors, which are prone to issue untruthful statements. Either DBSA is lying, or its Russian counterpart VEB.RF is lying

This development also potentially has direct and indirect financial implications. This is exactly not the kind of focus we need from the Development Bank on the same day as the Rand lost some of its hard-fought gains.

With South Africa already on the FATF greylist, we should be actively working against the perception of financial flows to and from naughty places. Any agreement exposes South Africa and its entire financial sector to undue risk of sanctions and isolation. This while Russia makes up 0.2% of our exports.

The DA calls on Boitumelo Mosako as CEO of DBSA to urgently publish the meeting minutes from the VEB.
RF engagement and any agreements signed in full. Failing that, we’ll require her to appear before parliament to account for the DBSA’s involvement at the BRICS summit.

In the interim, the DA has submitted a PAIA request to DBSA regarding their engagements and agreements signed at the BRICS summit.

South Africa should not align itself with regimes that violate international law and human rights. Any engagement with entities like VEB.RF, which props up Russia’s defence capability risks tarnishing our country’s global standing and undermining our hard-fought-principles of democracy, and may create high-risk financial liabilities.

Source: Democratic Alliance