As South Africa is on the verge of being kicked out of the African Growth and Opportunity Act (Agoa) under US President Donald Trump’s administration, agricultural economists warn that losing access to this crucial market would deal a significant blow to South African producers and could likely impact the country’s economy.
National Agricultural Marketing Council (NAMC) senior economist Thabile Nkunjana said a significant portion of several agricultural products would be vulnerable should the United States of America (USA) either increase the tariffs or take South Africa out of Agoa.
“The United States is the second-largest market in the Americas for South Africa’s total trade, after China. This demonstrates how significant the USA is as a trading partner. Thus, it is imperative that South African officials continue to have positive and cordial connections with the United States. In terms of the agricultural sector, as of 2024, about 4% of South Africa’s agricultural exports come from America,” he explained.
“In 2024, for example, roughly 8% of oranges worth R14.6 billion, 11% of mandarins worth R10.5 billion, and 27% of macadamias worth R2.4 billion were sent to the United States.”
Thabile Nkunjana
US exports crucial to SA economy
Nkunjana said it is impossible to ignore the US market although South Africa is working to diversify its export markets.
“The fact that several of its products are headed for the US market in significant quantities suggests that trade connections between the US and South Africa are crucial. Finding other markets to pick up the quantity of products that South Africa exports to the United States would take years.
“In actuality, even for the USA, it would be difficult, if not impossible, for a country to live on its own. All countries have been able to expand their economies and feed their populations because of global trade,” he said.
Related stories
- Thailand and Philippines open doors for SA’s top fruits
- Trump’s land claims: Agri stakeholders set record straight
Nkunjana said the US agricultural sector is also under-constrained and needs exports to continue feeding its nation because of its growing population.
“For example, the average amount of vegetables that are accessible for eating in the United States has decreased over the last ten years. In 2022, there were 359.1 pounds of vegetables available for consumption per capita, down from 365.9 pounds in 2021. As a result, in 2023, Mexico provided 47% of the United States’ fruit and nut imports and 63% of its vegetable imports,” he said.
While the political and trade tension continues between the two countries, President Cyril Ramaphosa’s spokesperson Vincent Magwenya said the government must focus on addressing the pressing needs of all citizens through dialogue and policies that strengthen social solidarity.
“We should all be actively engaged in building a better South Africa in the face of unpredictable geopolitical dynamics,” he said.
Seizing other trade opportunities
Meanwhile, Agbiz chief economist Wandile Sihlobo said the country can take advantage of the trade war between the USA and China as the two countries have imposed tariffs on each other.
“China will continue to be a priority for South Africa’s efforts to enhance its agricultural exports. While we currently lack extensive access to China for our agricultural products, tremendous potential exists.
“China is the biggest opportunity, mainly because of its population and economic size. China, the world’s second-largest economy after the US, must feed its large population. South Africa has lagged behind its competitors in gaining from this growth in Chinese imports.”
Wandile Sihlobo
Sihlobo said China’s size warrants more attention from South African policymakers. China’s top agricultural imports include oilseeds, meat, grains, fruits and nuts, cotton, beverages and spirits, sugar, wool, and vegetables.
“South Africa is already an exporter of these products to various countries in the world and is producing surpluses for some. This means there is room to expand to China, especially as South Africa’s agricultural production continues to increase, with more volume expected in the coming years.
“Therefore, it makes sense for South Africa to focus more on widening export markets to China. This means arguing for a broad reduction in import tariffs that China currently levies on some of the agricultural products from South Africa. Removing phytosanitary constraints in various products is also key,” he said.
READ NEXT: Tru-Cape strengthens apple & pear exports in Africa and Asia
Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain.
