South Africa should send a firm message to neighbouring Namibia and Botswana about its interest in maintaining smooth trade within the Southern African Customs Union, says Agbiz chief economist Wandile Sihlobo
THE AGRICULTURAL Business Chamber’s (Agbiz) chief economist, Wandile Sihlobo, said that South Africa should send a firm message to neighbouring Namibia and Botswana about its interest in maintaining smooth trade within the Southern African Customs Union (Sacu) and that these countries should ease the current restrictions on vegetables.
“If there are attempts to revive their domestic vegetable industries, such should be communicated clearly to South Africa, as an affected partner, with clear time frames of these bans. Such information would be valuable in assisting the South African industry and government to plant appropriately for export markets to other regions when the ban is in place,” Sihlobo said.
More importantly, he said, South Africa’s agriculture and trade ministries must intensify their efforts to widen the export markets to regions in Asia and the Middle East.
“Countries such as India, China and Saudi Arabia should be on the top of the agenda for deepening trade and co-operation. Still, these should not be at the expense of existing trade partners but an addition. The political relationship established through BRICS+ is the first step, and South Africa should capitalise on it,” he said.
These countries had large populations and strong economic power.
“Notably, they collectively import over $270 billion (R5 trillion) of agricultural products a year, according to data from Trade Map. South Africa’s participation in these countries remains small and should increase in the coming years,” he said.
In a world increasingly fractured by the ongoing wars, growing geopolitical tensions, and divisions on alignments to these tensions, South Africa’s government and business must continuously work to open new export markets and diversify from the long-existing ones to spread the risks should the tensions be prolonged, Sihlobo said.
“South Africa’s relationship with the long-existing markets in the EU, the African continent, and some Asian and American countries must be nurtured. This is a crucial step as some countries may not outright block trade between countries in this fractured world but use non-tariff barriers.”
Sihlobo said the EU recently used non-tariff barriers by alleging a “false codling moth”, a citrus pest, in South Africa and requiring that citrus products be kept at certain temperatures before accessing the EU market. This had happened while South Africa had already treated the products to eliminate the chances of such pest occurrence.
Sihlobo said organised agricultural stakeholders should all be vocal about trade and logistics in their various engagements with the authorities and collaborate with them to improve these areas for the long-term growth of this vital sector of the South African economy.
Statista puts the revenue in the fresh vegetables market at $2.9bn this year. It says this market is expected to grow annually by 7.76% to 2028.
– BUSINESS REPORT
