WANDILE SIHLOBO: Sacu region remains a crucial market for SA’s agricultural exports
Over time, Sacu may have to export to the world and promote products from a regional perspective
03 February 2025 - 16:17
byWandile Sihlobo
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
With the return of Donald Trump as US president, trade relations have become a top-of-mind issue and probably will be for some time to come. Trump has wasted no time imposing import tariffs against various countries.
In this world of potential trade disruptions it is important for countries with strong trade ties to strengthen relations. For SA's agricultural sector the African continent is the largest trading partner, accounting for roughly 40% of the country’s agricultural exports of about $1.,2bn in 2023.
While prospects for growth of this market remain uncertain because of high saturation, with far faster export growth likely to Asia and the Middle East, retaining existing export markets is critical for SA agriculture.
In the recent past there has been some friction in SA’s trade relations with the Southern African Customs Union (Sacu), a free trade zone that includes Botswana, Namibia, Lesotho and eSwatini as well as SA.
In 2021 Botswana banned imports of vegetables from SA, which continued until its removal by the new administration of president Duma Boko in December 2024. Namibia’s similar ban, which started shortly after that of Botswana, remains in place.
Their rationale for the ban on vegetable imports was that they were building their domestic industries and these required cushioning. But such bans on imports of agricultural products add uncertainty and weigh on farmers. Moreover, they have fueled a drive in some quarters for the Sacu agreement to be reviewed.
On January 16 there was renewed friction as Botswana banned imports of grains from SA, including maize, sorghum and wheat. The ban extended to pawpaw, kiwi and coconut, among other products. The reason for this was the apparent detection of Goss's Wilt in a few maize-growing regions of Free State, North West, Gauteng and Eastern Cape.
Botswana banned imports of a wide range of products, even though preliminary research showed that the risk was mainly in maize seeds for planting, and the responsible bacterium would not be transferred in maize for feed or human consumption. In other words, there was no scientific evidence of risks to other products.
Fortunately, on January 24, after SA and Botswana officials had deliberated on the issue, Botswana removed the ban and allowed trade to resume. But the ban again raised the question of why the Sacu signatories are not communicating earlier and co-operating better on such scientific questions.
Namibia again followed Botswana’s actions and banned imports of SA grains, as well as various other agricultural products. This added to Namibia’s current ban on SA vegetable imports. At the time of writing this note Namibia had not followed Botswana in removing the restrictions.
Botswana and Namibia’s trade policy approach has weighed negatively on SA's agricultural exports. The Sacu region is vital to SA. According to our calculations, using data from Trade Map, the region accounted for about 20% of SA’s agricultural exports of $13.2bn in 2023. This equals the value of SA’s agricultural exports to the EU.
The only difference between the EU and Sacu is the products in the export basket. The EU tends to import more fruits and wines, while the Sacu basket is heavy on grains and beverages.
SA typically imports less than $1bn from Sacu each year, averaging $769m over the past five years. This is about 11% of SA’s agricultural imports on average each year. The imports are mainly live animals (cattle) and sugar. The major exporters to SA in Sacu are eSwatini and Namibia.
Given that this is a huge export market for SA and an essential one for the other Sacu nations, the logical steps should be to preserve trade and reduce the frequency of unilateral export bans. The policy ambition of Sacu members to increase domestic production could focus on leveraging scientific advancements and investments from SA, which has mature agriculture and food, fibre and beverage value chains.
Ideally, collaboration should be the path forward rather than confrontation. Indeed, SA’s Sacu market does not promise much growth potential. Still, these exports are vital for regional food security and stability. Diversifying export markets to other regions to ease risk in future is key, but it should be viewed as part of long-term market development, not as a replacement for the existing Sacu market. Over time, Sacu may have to export to the world and promote products from a regional perspective.
In a global environment that appears likely to feature more inward-looking trade policies going forward, countries with longstanding trade relations such as those in Sacu need to strengthen their partnerships and avoid the allure of antagonistic trade policy such as we see rearing its head in other parts of the world.
SA’s departments of agriculture; trade, industry and competition and international relations and co-operation should work collectively to strengthen trade ties with SA’s existing partners, including Sacu.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA and an extraordinary senior lecturer in Stellenbosch University’s department of agricultural economics.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
WANDILE SIHLOBO: Sacu region remains a crucial market for SA’s agricultural exports
Over time, Sacu may have to export to the world and promote products from a regional perspective
With the return of Donald Trump as US president, trade relations have become a top-of-mind issue and probably will be for some time to come. Trump has wasted no time imposing import tariffs against various countries.
In this world of potential trade disruptions it is important for countries with strong trade ties to strengthen relations. For SA's agricultural sector the African continent is the largest trading partner, accounting for roughly 40% of the country’s agricultural exports of about $1.,2bn in 2023.
While prospects for growth of this market remain uncertain because of high saturation, with far faster export growth likely to Asia and the Middle East, retaining existing export markets is critical for SA agriculture.
In the recent past there has been some friction in SA’s trade relations with the Southern African Customs Union (Sacu), a free trade zone that includes Botswana, Namibia, Lesotho and eSwatini as well as SA.
In 2021 Botswana banned imports of vegetables from SA, which continued until its removal by the new administration of president Duma Boko in December 2024. Namibia’s similar ban, which started shortly after that of Botswana, remains in place.
Their rationale for the ban on vegetable imports was that they were building their domestic industries and these required cushioning. But such bans on imports of agricultural products add uncertainty and weigh on farmers. Moreover, they have fueled a drive in some quarters for the Sacu agreement to be reviewed.
On January 16 there was renewed friction as Botswana banned imports of grains from SA, including maize, sorghum and wheat. The ban extended to pawpaw, kiwi and coconut, among other products. The reason for this was the apparent detection of Goss's Wilt in a few maize-growing regions of Free State, North West, Gauteng and Eastern Cape.
Botswana banned imports of a wide range of products, even though preliminary research showed that the risk was mainly in maize seeds for planting, and the responsible bacterium would not be transferred in maize for feed or human consumption. In other words, there was no scientific evidence of risks to other products.
Fortunately, on January 24, after SA and Botswana officials had deliberated on the issue, Botswana removed the ban and allowed trade to resume. But the ban again raised the question of why the Sacu signatories are not communicating earlier and co-operating better on such scientific questions.
Namibia again followed Botswana’s actions and banned imports of SA grains, as well as various other agricultural products. This added to Namibia’s current ban on SA vegetable imports. At the time of writing this note Namibia had not followed Botswana in removing the restrictions.
Botswana and Namibia’s trade policy approach has weighed negatively on SA's agricultural exports. The Sacu region is vital to SA. According to our calculations, using data from Trade Map, the region accounted for about 20% of SA’s agricultural exports of $13.2bn in 2023. This equals the value of SA’s agricultural exports to the EU.
The only difference between the EU and Sacu is the products in the export basket. The EU tends to import more fruits and wines, while the Sacu basket is heavy on grains and beverages.
SA typically imports less than $1bn from Sacu each year, averaging $769m over the past five years. This is about 11% of SA’s agricultural imports on average each year. The imports are mainly live animals (cattle) and sugar. The major exporters to SA in Sacu are eSwatini and Namibia.
Given that this is a huge export market for SA and an essential one for the other Sacu nations, the logical steps should be to preserve trade and reduce the frequency of unilateral export bans. The policy ambition of Sacu members to increase domestic production could focus on leveraging scientific advancements and investments from SA, which has mature agriculture and food, fibre and beverage value chains.
Ideally, collaboration should be the path forward rather than confrontation. Indeed, SA’s Sacu market does not promise much growth potential. Still, these exports are vital for regional food security and stability. Diversifying export markets to other regions to ease risk in future is key, but it should be viewed as part of long-term market development, not as a replacement for the existing Sacu market. Over time, Sacu may have to export to the world and promote products from a regional perspective.
In a global environment that appears likely to feature more inward-looking trade policies going forward, countries with longstanding trade relations such as those in Sacu need to strengthen their partnerships and avoid the allure of antagonistic trade policy such as we see rearing its head in other parts of the world.
SA’s departments of agriculture; trade, industry and competition and international relations and co-operation should work collectively to strengthen trade ties with SA’s existing partners, including Sacu.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA and an extraordinary senior lecturer in Stellenbosch University’s department of agricultural economics.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.