From an agricultural economic standpoint, South Africa had an eventful year. Looking ahead to 2024, economists predict that certain trends will persist, and there are crucial areas that need attention to enhance trade among Brics nations.
At a recent media day organised by the Agricultural Business Chamber (Agbiz), the association of agribusinesses operating in South and Southern Africa offered valuable perspectives on steering the future of South African agriculture.
The event shed light on crucial aspects such as trade dynamics, storage practices, legislative considerations, and emerging trends in the agricultural sector.
SA’s competitive advantage
According to Agbiz’s CEO Theo Boshoff, competitiveness will be the key to survival, highlighting several advantages to South Africa.
“We have several advantages which include a robust financial industry, intellectual property, high technology uptake, geopolitical positioning, counter seasonality, a diverse climate, and an agile and loyal private sector,” Boshoff shared in his presentation.
Pointing to trends that are likely to continue into 2024, Boshoff said unpredictable global and natural climate will unfortunately remain our fate. “As well as geopolitical risks and protectionism, and activism in agriculture.”
He said that it will continue to be a case of survival of the fittest.
South African agriculture, is, however, disadvantaged in some areas. According to Boshoff, these include poor service delivery, slow transformation and barriers to entry, cost of capital, disease control, and tariff barriers to name a few.
Enhancing agri trade opportunities for SA
Giving a breakdown of agriculture’s role within Brics, Wandile Sihlobo, chief economist at Agbiz, shared why Brics remains an important agricultural market.
Sihlobo said while Brics is fundamentally a multilateral cooperation mechanism, the changing geopolitical and economic landscape has increased the need for countries with close cooperation to improve trade.
“Making intra-Brics trade more competitive and reducing various barriers would help deepen trade among these countries. Reducing import tariffs, addressing SPS issues, and various non-tariff barriers would help deepen trade amongst these countries,” he said.
Promoting SA within Brics community
South Africa has an export-oriented agricultural sector that currently requires increased access to a range of export markets. Brics is an important avenue for SA to achieve this goal, Sihlobo said.
Brics countries account for a relatively small share of South Africa’s agriculture exports – an average of 8% over the past 10 years in annual average agricultural exports of US$9,9 billion.
These realities, Sihlobo added, imply that the South African representatives should continue to advocate for lowering import tariffs for agricultural products, specifically within India and China.
“At the same time, the business community will have to actively promote the proudly South African agriculture (and broadly food, fibre and beverages) products in this grouping of countries,” he said.
According to Sihlobo, a united Brics on trade has the potential to increase trade volumes from beyond just five member states.
This would potentially bring trade flows into Brics from other countries in Asia, South America, Eastern Europe, and Africa.
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