EU unveils new investment package for South Africa

On Thursday, EU Commission President Ursula von der Leyen unveiled plans to invest billions of euros in South Africa, as Europe aims to strengthen its influence in a nation increasingly scrutinized by the United States.

During a summit with European Council President Antonio Costa and South African President Cyril Ramaphosa, von der Leyen announced an investment package totaling 4.7 billion euros (approximately $5 billion) for South Africa.

The majority of this funding, amounting to 4.4 billion euros, will be allocated to clean energy initiatives, including the utilization of wind and solar power, as well as the production of clean hydrogen, according to a statement from the EU.

Additionally, 700 million euros will be dedicated to enhancing vaccine manufacturing capabilities in South Africa, which is the most industrialized nation on the continent.

“South Africa aims to safeguard the health of its citizens, as well as its autonomy and local industries. We Europeans seek to diversify some of our most essential supply chains. This represents a genuine mutual interest,” von der Leyen remarked.

South Africa stands as the EU’s largest trading partner in sub-Saharan Africa, exporting approximately 24 billion euros worth of goods to the EU in 2023, primarily consisting of minerals and automotive products.

However, the trade balance is skewed in favor of the EU, with total bilateral trade reaching 49.5 billion euros in 2023.

In 2022, EU foreign direct investment in South Africa was around 71 billion euros.

Both parties are facing significant policy changes from Washington following the return of US President Donald Trump to office this year.

The Trump administration has targeted the South African government by freezing essential aid and criticizing various policies.

Meanwhile, Washington has enacted a 25 percent tariff on steel and aluminum imports from the EU. On Thursday, President Trump threatened to impose a 200 percent tariff on wine, champagne, and other alcoholic beverages from the 27-member bloc.