Don’t forget your friends: maintaining trade relationships while diversifying in South Africa

South African agricultural economist, Wandile Sihlobo, argues that South African farmers need to diversify their export markets as they look to expand their production. South Africa exports about half of its agricultural goods and there is little room for growth in the South African market itself. Previously, Sihlobo has advocated for international expansion in countries like India and China where there is strong economic growth and increasing purchasing power. However, he now argues that farmers should look to Africa for expansion, namely SADC (Southern African Development Community) where proximity and infrastructure make market access relatively easy. Despite this, he argues South Africa should not forget its existing markets, including the EU, and must work hard to maintain these.

South Africa's agricultural sector
Beeld: ©Attribution 2.0 Generic (CC BY 2.0)
South Africa's agricultural sector

Sihlobo makes mention of these existing partnerships in a more recent discussion. He argues that markets with strong trade are important for the country as it navigates the global uncertainties of our time. However, the country’s recent engagements with Russia, may raise some eyebrows about where the country is heading. Nonetheless, it is clear that South Africa continues to remain heavily reliant on its existing partners in Asia, Europe and the US, in comparison to Russia who accounts for only 2% of its agricultural trade. Thus, it makes sense for the country to continue building on what it already has. It benefits immensely from trade with the EU, which consumes almost 20% of the country’s agricultural exports, while it also benefits from duty-free access to markets like the US.

Click the links below to listen and to find out more:

Africa is an important market for SA agriculture - Agricultural Market Viewpoint with Wandile Sihlobo | Podcast on Spotify

Risk to SA’s agricultural sector amid rising geopolitical tension (