In today’s climate of growing geoeconomic tensions, the urge to align countries, industries, and businesses with specific interests or regions is strong. However, businesses and industries should ideally remain neutral and broaden their activities across diverse nations.
This approach is particularly significant for South Africa’s agriculture sector, which is export driven. In 2024, agricultural exports reached a record $13.7 billion, a 3% increase from the previous year. These exports are diverse, with nearly half destined for the African continent and sizable shares going to the EU, Middle East, Asia, and the UK. To build on this success, South Africa must maintain and expand trade relations with regions offering further opportunities.
While the EU is a key trading partner, South Africa’s agricultural trade with the region faces challenges, especially concerning citrus products. EU farmers are increasingly advocating for measures to protect local producers, which could lead to occasional non-tariff barriers on sensitive goods. Despite limited growth potential in the EU market, maintaining strong ties is essential to preserve current access for South African exports.
In contrast, the Middle East offers significant potential for growth. Unlike the EU, it is less saturated and lacks competing domestic agricultural industries. Currently, South Africa’s share in this market is modest, accounting for just 1% of Saudi Arabia’s $25 billion agricultural imports and 2% of the UAE’s $22 billion imports. Targeted marketing, government support, and addressing remaining trade barriers could help South African agriculture strengthen its position in this region.
Similarly, preserving access to the U.S. market is crucial. With the uncertainty surrounding AGOA, South Africa must focus on establishing a free trade agreement and addressing higher tariffs imposed by the U.S.
On the African continent, which remains central to South Africa’s agricultural exports, ongoing diplomatic engagement is essential. This will help prevent issues like recent export restrictions in Botswana and Namibia, ensuring smooth trade relations within the region.
In conclusion, South Africa’s agriculture sector must adopt a long-term approach, emphasizing diversified international relationships. The government and businesses should work together to open new markets and sustain existing ones. The sector’s growth, inclusivity, and ability to create jobs depend on its success in expanding export opportunities globally.
Source: Wandile Sihlobo