After weeks of economic turmoil and uncertainty surrounding Russian President Vladimir Putin’s attendance of a BRICS summit in South Africa later this year, it now appears he will be giving the event a skip.

According to The Sunday Times, President Cyril Ramaphosa had convinced Putin to stay home, citing sources close to the matter.

Ramaphosa was in Russia recently as part of a delegation of African leaders seeking peace between the country and Ukraine, which it invaded in February 2022 and has been waging war in ever since.

The South African president reportedly used the opportunity to present Putin with three options around the BRICS summit: staying away, attending virtually, or attending in person but at another location.

Putin was amicable to option one, the sources said, with Russian foreign minister Sergey Lavrov expected to come instead.

Why is it such a big issue?

The question of Putin’s attendance has caused havoc in South Africa to the extent that it directly impacts local markets.

The International Criminal Court (ICC) has issued an arrest warrant for the Russian leader for his role in allegedly kidnapping and trafficking Ukrainian children into Russia.

As a party to the ICC, South Africa would be obligated to arrest Putin if he steps foot into the country, with no legal way out. The government has been cagey about its intentions regarding this issue, with the narrative continuing that South Africa is friendly and pro-Russia – drawing the ire of Western nations.

Markets were pushed into a panic as this narrative built momentum over the past few months and hit a peak after economists, analysts, and even the South African Reserve Bank flagged risks of the country facing secondary sanctions due to its ties to Russia.

This sent a message across markets that the country would be putting in excess of R400 billion’s worth of trade agreements with Western nations at risk if it continued its perceived support of Russia.

Not in the clear yet

Ramaphosa has moved to break this narrative over the past few weeks, and having Putin steer clear of the BRICS summit will go a long way in easing the pressure on South Africa to do so.

Without the complex and politically fraught conundrum of having to arrest the president of a key BRICS partner, the government can direct its attention to other foreign policy tensions.

The Ramaphosa-led African delegation to Russia and Ukraine has already tried to douse talk of South Africa being pro-Russia – the president has made it clear that the war must end and peaceful measures be used – but questions still hang in the air around whether or not South Africa gave military aid to Russia.

The country faces an uphill battle shaking its pro-Russia perceptions.

Allegations by the US embassy that South Africa armed Russia in December 2022 when the Lady R docked in Simon’s Town under cover of darkness are still being investigated.

But even outside of this, participating in war games with Russia on the anniversary of its invasion of Ukraine, allowing sanctioned vessels and aircraft to land at military ports, and anti-West utterances from the government party and other politicians cannot be swept away so easily.

According to Investec chief economist Annabel Bishop, anxieties over South Africa’s proximity to Russia hang heavy in the air, keeping investors at bay.

The Institute of International Finance (IIF) recently flagged South Africa’s ties to Russia and potential sanctions as a key risk – a position that has been repeated time and time again in various reports looking at the country’s growth prospects.

On South Africa, the IIF noted, “the near-term direction of nonresident capital flows…will depend on whether the West imposes sanctions on South Africa, whose external financing needs look set to rise in line with its widening current account deficit.”

The IIF warned that investors would remain “extremely sensitive to any developments on South Africa’s relations with Russia” and that findings around South Africa’s ties with Russia are the key near-term risk.

“Western sanctions would trigger a sharp selloff of South African assets, increase external financing risks, and lead to potential rating downgrades,” it said.