Those Who Control the Money Control the World

Johan van der Merwe | Africa Fellow

 Image sourced from Audy of Course via Pexels

International monetary policy has turned militaristic. In 2012, the West discovered that the Society for Worldwide Interbank Financial Telecommunication (SWIFT) could be turned into a weapon. When Iranian banks were disconnected from SWIFT, Iran lost half of its oil export revenues and 30 per cent of foreign trade. A decade later, Russia’s invasion of Ukraine prompted the exclusion of seven major Russian banks from the same system, sending the rouble into a 30 per cent freefall. Africa once watched these episodes as distant cautionary tales. It can no longer. In April 2025, the US-South Africa Bilateral Relations Review Act of 2025 was introduced in the US House of Representatives, calling for targeted sanctions on African National Congress (ANC) officials for maintaining ties with China, Russia, and Iran. It passed the House Foreign Affairs Committee 34 votes to 16 in July, with a Senate companion bill which followed in September. This represents, for the first time, the prospect of international financial institutions being used to exclude Africans financially in order to advance political objectives without the use of force. Ironically, the martial approach taken by the US presents opportunity for African fin-techs and could end up threatening US currency global dominance as it spurs the creation of alternative systems.

Non-neutrality of SWIFT

SWIFT is not neutral infrastructure. It is overseen by a G-10 consortium in which no African state holds a seat, and its disconnection of Iran, North Korea and Russia has demonstrated that any government whose foreign policy diverges from Western preferences can be expelled from the global payments system at will. As Harvard economist Jeffrey Frankel has argued, the use of SWIFT to enforce sanctions is an exercise in the extraterritorial reach of US law, a tool that allows Washington to impose economic consequences on any government whose foreign policy it dislikes, without a single vote cast in an international body. The ANC sanctions bill makes this concrete, although not yet implemented. South Africa’s BRICS membership; its ties to China, Russia, Hamas and Iran; is precisely the basis on which financial exclusion is now being contemplated.

The effect on Africa

The effectiveness of financial sanctions derives from the reserve currency status of the US dollar. Even setting aside the sanctions threat, the dollar-dependent payments system imposes a structural cost on African development that has nothing to do with geopolitics. As economist Lauren Johnston documents, accessing sufficient foreign currency reserves for development financing and debt repayment has long been a binding constraint on African growth. Furthermore, when a Kenyan manufacturer pays a Nigerian supplier, as an example, the money does not travel from Nairobi to Lagos, rather it routes through correspondent banks in New York, converting from shillings to dollars to naira, with fees extracted at every step. This friction costs the continent an estimated USD$5 billion annually. Ultimately, capital leaves Africa to pay for the privilege of Africans trading with each other.

Africa’s next move

The dominant response to both pressures is the BRICS “dedollarisation” agenda. This is driven by Russia’s need to circumvent sanctions and China’s ambition to internationalise their currency. Neither motive aligns with African development needs. The answer to Africa’s economic development and Western financial coercion is not unconditional alignment with Beijing’s monetary architecture or a new BRICS currency. Monetary sovereignty cannot be borrowed from a rival great power. Substituting Chinese financial dependency for US financial dependency is not monetary sovereignty. Sovereignty looks like a continent that pays itself in its own currencies, on infrastructure it controls, through fintech ecosystems it has built, and with enough of the informal economy left untouched to preserve the economic autonomy of the people SWIFT has never served anyway. Africa has built its own answer: the Pan-African Payment and Settlement System (PAPSS), which now connects 19 countries and 150 commercial banks, enables settlement in local currencies in under 120 seconds, with no dollar intermediary and no New York clearing bank.

The economic case for PAPSS and African local currency settlement has been made for years but has been met with a lack of political urgency. What the US-South Africa Bilateral Relations Review Act  inadvertently provides is precisely that urgency. Many African politicians maintain ties with China, Russia and Iran. As a result, they may now be asking a simple question: if Washington can freeze the assets and limit the financial access of ANC officials today, what prevents it from taking similar action against others tomorrow? When financial exclusion becomes a personal threat to sitting politicians rather than a theoretical risk to national economies, monetary reform stops being a development argument and becomes a matter of political survival. The sanctions may encourage governments to reduce their dependence on the dollar and protect themselves from future penalties. In turn, this could support greater African independence and development.

Johan van der Merwe is in his final year at the University of Sydney, completing a Bachelor of Laws and Bachelor of Arts with a major in Economics.

Born in Australia to South African parents, Johan has always had an interest in Africa’s intricate socio-political landscapes, liberation movements, and economic challenges. This fascination deepened during his years at Hilton College, a boarding school in South Africa. His connection to the continent endures today as a director of De Aap Private Nature Reserve.

Johan has studied in Scotland and the Netherlands and undertook research at the European Commission in Brussels, which shaped his passion for international policy. Johan also brings legal expertise from his time at Norton White and his current role at K&L Gates LLP. 

His intellectual interests lie at the intersection of law, religion and development economics, underpinned by a passion for political philosophy and individual liberty. 

The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views and opinions of Young Australians in International Affairs. AI tools were used by this author for editorial assistance, including grammar checks, phrasing suggestions, layout and structural refinement but all content is original and no plagiarism has been used in the preparation of this article.