Boosting Agricultural Exports: South Africa’s Role at the BRICS Summit

South Africa’s agricultural industry is fundamentally export-oriented, with international trade significantly fueling its development over the last three decades. As geopolitical tensions rise, there’s an urgent necessity for the nation to broaden its agricultural export markets. During the BRICS summit, scheduled from October 22 to 24, 2024, in Kazan, Russia, South Africa should emphasize enhancing its trade relations with key BRICS nations – Brazil, Russia, India, China, and South Africa itself – along with exploring other potential markets. Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of South Africa, stresses the importance of increasing market access within the BRICS framework to secure the future of the country’s agricultural sector.

Current Challenges in South Africa’s Agricultural Exports

The achievements of South Africa’s agricultural sector in recent decades can be traced back to two main strategies: investing in crop, horticulture, and livestock genetics, and aggressively expanding export markets. With production steadily increasing, the capacity for growth remains strong, but existing initiatives need to be further amplified.

Nevertheless, major obstacles persist, especially in critical markets such as China, India, Saudi Arabia, and Egypt, where high import tariffs and phytosanitary obstacles hinder market access. Other promising Asian markets, like South Korea, Japan, and Vietnam, pose similar challenges. To remain competitive, South Africa must prioritize developing seed and livestock breeding programs that are resilient to worsening climate conditions, as these initiatives are vital for ensuring long-term food security and stable agricultural productivity.

The Need to Diversify Export Markets

South Africa stands out as the only African nation among the top 40 global agricultural exporters, achieving an export value of $13.2 billion in 2023, ranking it 32nd worldwide. However, trade access to key markets, like the European Union (EU) and neighboring African countries within the Southern African Customs Union (SACU), is becoming increasingly precarious due to rising protectionist trends. South Africa has already encountered non-tariff barriers, especially with citrus exports to the EU, along with restrictions on vegetable and citrus shipments to Botswana and Namibia.

In light of these challenges, Wandile Sihlobo contends that it is essential for South Africa to diversify into new markets, especially within the BRICS alliance and other strategic regions. To thrive, South Africa needs to not only sustain its current export relationships but also proactively seek new opportunities. This mission will require collective efforts from the government, private sector, and stakeholders, including the Department of Agriculture, to negotiate favorable trade conditions and lessen non-tariff barriers.

Political Leadership and Trade Diplomacy

Trade matters are inherently influenced by politics, and Sihlobo highlights the critical role of South Africa’s political leadership in navigating these challenges. The Department of Trade, Industry and Competition (DTIC) and the Department of International Relations and Cooperation (DIRCO) must actively engage with other nations to tackle trade disputes and unlock new markets. Sihlobo notes that DIRCO’s engagement in economic diplomacy is increasingly vital, especially against the backdrop of growing geopolitical tensions that are reshaping global trade.

South Africa’s recent decision to file a dispute with the World Trade Organization (WTO) concerning the EU’s citrus restrictions illustrates how political and diplomatic actions can effectively mitigate protectionist barriers. According to Sihlobo, such measures should serve as a model for South Africa’s future trade interactions, particularly as it manages complex relationships within SACU and the broader BRICS consortium.

A Strategic Opportunity

The upcoming BRICS summit offers a valuable platform for South Africa to advocate for enhanced agricultural trade relationships with its partners in the bloc. Although BRICS does not function as a formal trade alliance, it still provides an opportunity for South Africa to push for more robust trade agreements. Currently, a mere 8% of South Africa’s total agricultural exports are directed toward BRICS countries, with the majority of trade concentrated in just a few commodities.

Wandile Sihlobo emphasizes that BRICS nations demonstrate substantial agricultural import needs, averaging $255 billion annually between 2019 and 2022. Notably, China constituted 71% of these imports, with India and Russia each accounting for 11%. South Africa produces many of the in-demand agricultural commodities, such as soybeans, beef, maize, and a variety of fruits. Hence, Sihlobo asserts that South Africa should leverage the BRICS summit as an opportunity to advocate for the removal of trade barriers and enhance market access for these goods.

Building on Momentum

Continuing the discussions from the 2023 BRICS Summit in Johannesburg, where South Africa highlighted the need for deeper agricultural trade, Sihlobo insists the 2024 BRICS Summit in Kazan should focus on practical steps to bolster trade. With the recent BRICS+ expansion to include new members such as Saudi Arabia, South Africa has a unique chance to broaden its agricultural export horizons.

Sihlobo insists that merely engaging in high-level discussions is insufficient; South African authorities must strive for concrete outcomes that will benefit the agricultural sector. By doing so, South Africa can ensure that its farmers and agribusinesses fully capitalize on BRICS+ opportunities, promoting the long-term viability and growth of the nation’s agricultural industry.