The Russia-Ukraine war has more significant implications for South Africans than we think. Sanctions
Published February 27, 2022
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After the last two years of pandemic trading, South Africa needs to have a booster in 2022. South Africa does not need to get wrapped up in a war and business sanctions right now.

Unfortunately, being part of the global business community, South Africa has over R77 billion wrapped up in Russian business investments, according to the Russian Embassy. Just because your business does not directly trade with a Russian company does not mean it won’t affect you.

Who are the local companies with exposure?

Companies like Naspers, ABInbev, Barloworld, and Bell Equipment all have deep ties with the Russians. With this in mind, it is easy to see how most South African businesses will feel some effects.

When dealing with media, business, construction, and alcohol, we can find services, shares, and products that will directly link with something we touch.

The instant devaluing of businesses and shares

Naspers and Proses Nv make up nearly 10% of the Satrix Top 40 Investments portfolio in SA. So any business or individual alike saw a steep drop in the share price over the last few days.

Naspers currently has an R7.6 billion exposure in Russia.

Bell Equipment owns 100% of the Russian subsidiary. That Russian company supports an independent dealer network. If there is a shutdown of business across borders or Nato deploys sanctions, there will be a serious implications on the mining and building sectors in the region.

Barloworld has an R3.4 billion exposure in its Eurasian order book, a star performer for the business. 88% of the firm’s orders were from Russia. Barloworld is entrenched in the South African business world, including banking, travel, and business.

These are just the large corporations dealing in the region, and there are thousands of companies with divisions or partners that will feel the heat.

As South Africa has always had close ties with Russia and China, we need to keep a beady eye on the developments.

Bizcash is a South African company that wants to grow SMEs in SA to ensure a sustainable future for all.

Speak to our team to find out more about how we can support your business with alternative funding options. Get in touch with us on 0861 93 93 93 or email us on info@bizcashscf.co.za or contact us here.

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Categories: Business / Finance