In addition to trying to isolate South Africa, campaigners sought to hurt its economy. A number of initiatives were tried, from imposing an oil embargo to trade sanctions and finally a series of disinvestment initiatives. The oil embargo was first proposed by the UN in 1963 but made little progress until Arab governments acted to impose an embargo in 1973 – a move that was counteracted when the government successfully obtained assistance from multinational oil companies to continue supply. Despite General Assembly resolutions in 1979 and 1980 and support from many oil-producing countries, including OPEC, opposition from key European and North American governments constrained the comprehensive implementation of that instrument.
The economic sanctions strategy was renewed in the mid-1980s, spurred on by the mass resistance to the attempted reforms introduced in the 1983 constitution and the government's subsequent violent crackdown and imposition of a state of emergency in 1985. The European Community and Commonwealth countries imposed limited trade and financial sanctions. The US administration of President Reagan opposed sanctions but imposed a limited export ban to head off stronger action in the US Congress. This move was trumped, however, when the US legislature forced through the 1986 Comprehensive Anti-Apartheid Act banning new US investment and new bank loans, sales to the police and military, and specific prohibitions against a range of goods – although strategic minerals, diamonds and gold, South Africa's largest export, were not included.
Innovative private sector initiatives complemented these governmental actions. Especially in the US, campaigners lobbied businesses to end their activities and investments with the South African state and businesses. Concerned shareholders introduced resolutions at company AGMs aimed at getting them to adopt the 'Sullivan Principles,' which required that businesses operating in South Africa ensure that all employees were treated equally in an integrated environment, both inside and outside the workplace, as a condition of doing business (which essentially made it impossible to operate given apartheid laws).
Campaigners also lobbied institutional investors, such as pension and endowment funds, to withdraw direct investments from South African-based companies and for US companies to divest from their South African interests. This 'divestment' strategy became a key focus of campaigning at American universities. By 1990 more than 26 US states and 90 cities had taken some form of binding economic action against companies doing business in South Africa. By the late 1980s, most of the world's largest companies had withdrawn from South Africa – motivated by a combination of the reputational risk of continued operations and because the climate for investment in South African had deteriorated badly.
In retrospect, analysts suggest that the direct impact of these economic sanctions was limited. South Africa circumvented trade sanctions through transshipment via countries not participating in the embargoes. The divestment campaigns were costly to the foreign firms that withdrew – often selling assets cheaply to local white businesses but keeping non-equity links that permitted them to continue operating – but did not significantly dent the economy.