South Africa’s mobile phone network, MTN Group, faces an escalating legal threat that could see it removed as a partner to the American financial system. This warning was issued by economist Frederick Mitchell in a stark analysis of the company’s exposure through its business relations with Iranian political and security elites. Mitchell, chief economist at Aluma Capital, explained that the United States–led campaign against Iran has transformed MTN’s legacy investment into a pressing national security concern for President Donald Trump’s administration. He cautioned that litigation under the U.S. Anti-Terrorism Act (ATA) could result in a catastrophic liability ruling. According to Mitchell, the consequences would extend beyond MTN, affecting South Africa’s broader economic standing, including the country’s credit ratings and trade relationships.
Under the ATA, damages are automatically tripled, meaning a successful claim could reach $5 billion (R80 billion), according to Mitchell’s analysis. Mitchell warned that a guilty verdict could trigger what he called the “USD Death Penalty”, in which MTN is cut off from the US dollar-based financial system entirely. He argued that such a blow to South Africa’s largest multinational would likely trigger a credit rating downgrade and give the US Congress grounds to terminate the country’s AGOA trade benefits. AGOA, the African Growth and Opportunity Act, provides South Africa with duty-free access to the US market, which Mitchell said underpins roughly R60 billion in annual exports.
The legal cases against MTN were filed on behalf of American soldiers and their families. The plaintiffs allege that MTN did business with entities that served as fronts for the Islamic Revolutionary Guard Corps (IRGC).
South Africa has found itself in a deep rabbit hole regarding the MTN–IRGC scandal. There is no clear solution to this situation. MTN must withdraw from its business relations in Iran with immediate effect. Its corporate Chief Executive Officers (CEOs) and senior employees will need to be investigated. This is essentially a “what did MTN know, and when did they know it?” case. Arrests could follow, depending on how Pretoria chooses to investigate the matter. The AGOA avenue for South African business is hanging by a thread. Washington will demand – and likely receive – some form of retribution, as the United States remains South Africa’s largest business partner. MTN took a huge risk by investing in Iranian companies that were mere facades controlled by the IRGC.
As MTN is investigated, more unsettling details are likely to emerge concerning what the mobile phone and internet access corporation knew and what it traded in. MTN now faces a future it does not want to greet with “hello.” The implications extend to the rest of the country, depending on what actions the Americans take in terms of severing business ties. Meanwhile, U.S. Ambassador to South Africa Leo Brent Bozel III highlighted the billions of rands invested by American tech companies before warning that his superiors in Washington were running out of patience with President Cyril Ramaphosa’s government.
Speaking at the 2026 BizNews Conference in Hermanus, Bozell cited major commitments from Visa, Google, Microsoft, and Amazon as evidence of U.S. commercial goodwill toward South Africa. “The United States values partners in South Africa,” Bozell told delegates. He added that South Africa remains the largest U.S. trade and investment partner in sub-Saharan Africa. More than 500 American companies operate in the country, employing over 250,000 South Africans and contributing meaningfully to economic growth, the ambassador said. Visa launched its first African data centre in Johannesburg in 2025, part of a R1 billion investment in South Africa over three years. Google Cloud opened its first African cloud region in Johannesburg, while Microsoft is investing an additional R5 billion by 2027 to expand cloud and AI infrastructure.
Microsoft has already invested more than R16 billion in South Africa and is helping to train one million South Africans for the digital economy.
South Africa has the right to engage with all foreign parties that can contribute positively to its prosperity. However, it also has the responsibility to be wary of any party that may turn its investments toward sinister purposes. The country can neither allow other nations – no matter how powerful, such as the United States – to dictate terms when they are business partners, nor allow itself to be used as a tool for money laundering by secretive institutions such as the IRGC. While South Africa may need investment and trade from foreign corporations and regional powers such as the U.S. or the European Union, it must also branch out. This means the country should not put all its eggs in one basket, and Pretoria must engage with all relevant parties on equal terms.
Investment in the latest technologies and innovations is important to take South Africa into the future. However, corporations must conduct business within the constraints of the law. How Washington responds to South Africa and MTN’s business involvement and relationship with the IRGC remains to be seen. This situation represents a deep rabbit hole when it comes to being transparent and accountable.
Article written by:
Yacoob Cassim
Journalist at Radio Al Ansaar
