The United States has very strong strategic interests in South Africa, particularly in Simon’s Town, which gives the country an opportunity to secure a favourable trade deal and billions in American investment.

Simon’s Town, and the broader Cape, has been significant in South Africa’s historical positioning as a global player over centuries.

In the 21st century, the port is no less important, with it being one of three points that anchors control of the Indo-Pacific, a region through which trillions in trade flows every year.

As a result, the port is playing an increasingly important role in geopolitics and is one of the reasons why American interest in South Africa has piqued in recent years.

This dynamic was outlined by political analyst Frans Cronje at the second annual BizNews Investment Conference, where he outlined Africa’s growing role in global politics.

“The Americans have immense strategic interests here, I have aired it previously that Simon’s Town is one of three points that anchors control of the Indo-Pacific and provides a backdoor to the Atlantic Ocean,” Cronje said.

This interest in Simon’s Town is coupled with increasing economic competition between the United States and China in Africa, for its resources and as a means to garner geopolitical support.

Africa’s 54 states provide a vital voting bloc at the United Nations and other global forums, able to sway decisions one way or the other.

“The Americans have fallen behind China in terms of fixed investment in Africa and the continent is important, it now has more cities of a million inhabitants or more than Europe and America combined,” Cronje said.

Africa remains the last untapped global consumer market, with its population steadily growing healthier and wealthier.

South Africa is particularly important for the United States given its influence as the largest economy on the continent and its democratic institutions.

American firms are limited by the Foreign Corrupt Practices Act in the United States, which prevents them from investing in undemoratic countries and engaging in corruption and bribery.

“So, South Africa is eminently investable from the American perspective and the US view on the country is unfavourable based on its slow economic growth and high unemployment,” Cronje said.

Cronje has previously called on South Africa to use the intense attention the country is receiving from the United States to secure a favourable trade deal and send out a better message about the country’s prospects.

Simon’s Town and strategy

Alongside the Solomon Islands and the Bab al-Mandab Strait, Simon’s Town is one of the three points that anchor the Indo-Pacific region through which more than half of global trade travels.

Cronje previously explained to PSG that the world is not multipolar in nature, where competing power bloc are looking to control or influence key choke points.

These choke points are commercial and naval shipping passages that are narrow and easily controllable from a single port.

Simon’s Town has been forgotten in recent years as one of these choke points, with the rise of the Suez Canal in 1869 enabling trade to flow from east to west and vice versa without going around the tip of Africa.

However, in the past few years, the southern sea route around the Cape has seen its importance skyrocket due to conflict in the Middle East and the rising importance of the Indo-Pacific.

“The Houthis in Yemen firing rockets into the Red Sea have diverted shipping around the Cape at a rate that is equivalent to what happened after the fall of Hong Kong and Singapore in World War II,” Cronje said.

Simon’s Town, as one of the most strategically located ports along this route, has become central to the geopolitical struggle to control the Indo-Pacific.

“The Americans understand that Simon’s Town is one of the three points that anchor control of the Indo-Pacific,” Cronje said.

“They are in some trouble on the other points, such as the Solomon Islands and the Bab al-Mandab Strait, so Simon’s Town has suddenly become very important to them.”

Furthermore, Simon’s Town is the backdoor to the South Atlantic, which is another crucial region considering the oil discoveries off the coast of Namibia and the rise of South America economically.

This is similar to the reason why US President Trump talks so much about Greenland, as it gives you access to the Atlantic.

“It takes rudimentary diplomatic skill to take America’s fixed investment interest and South Africa’s strategic importance to form a new bilateral treaty,” Cronje said.

A new bilateral trade treaty with the United States could meaningfully increase fixed investment in South Africa and boost economic growth.

“I think it is a vast opportunity for this government that they can take advantage off if they can adopt the correct strategy,” he said.

Simon’s Town remains a relatively sophisticated port, with surveillance equipment installed in 1973 still being able to track nearly all ocean traffic in the South Atlantic and South Indian oceans. (DAILY INVESTOR)