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'Limited scope for growing South African agricultural exports in African markets'

South Africa’s agricultural sector is arguably one of the most vibrant on the continent. It follows that the importance of trade and logistics to South Africa’s agricultural sector cannot be over-emphasized. However, for the sector to remain vibrant it will have to urgently and continually expand and diversify its markets beyond the traditional ones such as those in the Southern African Development Community (SADC), the EU and Asia.

The desired export markets for agribusinesses in horticulture, beyond the existing markets, are Japan, China, Saudi Arabia, Bangladesh and India, amongst others. There is also interest to expand trade within the African continent beyond the SADC region, where nearly 89% of South Africa’s agricultural exports to the continent are concentrated.

But the main question is whether the African continent can really be the saving grace for South Africa’s agricultural exports, as it is purported to be.

Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) Wandile Sihlobo and his fellow agricultural economist Dr Tinashe Kapuya considered this question. Their view is that the benefits of the AfCFTA are not as much as many have reported, due to structural limitations to expansion into untapped markets in the continent.

Most of South Africa’s agricultural exports into the African continent (89%) are concentrated within the Southern Africa Customs Union (SACU) and the Southern African Development Community (SADC) Free Trade Area (FTA).

However, the product scope of exports into SACU and SADC is quite diverse and includes maize, processed food products, apples and pears, fruit juices and wine. With 90 cents out of every rand in African agricultural exports earned within SACU/SADC under an expanded diverse set of products, it is important to diversify export markets beyond the region. But, just how much more can South Africa export beyond SACU/SADC, into the West, East and North Africa regions?

Click here to read the full article.


Photo source: Dreamstime.com


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