Why SA’s agricultural export growth depends on rebuilding lost trade expertise

The government and private sector’s stated commitment to export diversification is a necessary and important first step – but serious trade talks with new export markets are now crucial.

By Nico van Burick, senior journalist at African Farming and Landbouweekblad

Export diversification is key to driving South African agriculture’s long-term growth path, says Wandile Sihlobo, chief economist at Agbiz.

This does not mean abandoning existing markets, he emphasises, but building on them. At the same time, human capital and expertise must be developed to engage with various countries on trade issues.

The term “export diversification”, he says, highlights two key challenges that require attention from both government and the business sector. First, strong technical expertise is needed within government to engage with new potential trading partners across different sectors of the economy. Second, it may require South Africa to reconsider its traditional resistance to free trade agreements. 

Challenge 1: Rebuilding South Africa’s Trade Expertise

First and foremost, strong technical expertise is needed within the South African government to engage with new potential trading partners across the various sectors of the economy.

South Africa could draw on a large pool of human capital in the early 2000s in terms of expertise on trade issues, particularly among senior negotiators and technical experts, Sihlobo says. Over time, things have probably changed somewhat because South Africa has focused on existing markets over the past decade, rather than, as in the early 2000s, constantly finding new ones.

He believes a review of available human capital is needed to ensure that relevant departments can sharpen their skills, as this will be essential to any effort to diversify trade. The South African political leadership has already emphasised its intention to diversify trade in discussions in the United States at the end of September.

Also read: SA canned fruit and veg industry at Anuga to grow exports

Coordinating Government Departments and Private Sector

Sihlobo says this message about the seriousness of the new approach has been conveyed both locally and internationally to put South Africa on global trade partners’ radar.

Therefore, the authorities involved in trade, industry and foreign affairs must ensure they have the technical capacity to manage this crucial task of export diversification, while also maintaining relationships with existing trading partners.

In all these discussions, the business community must play a key role. It understands which core markets have been identified and will be responsible for carrying out trade once formal government agreements are concluded.

The private sector can also contribute resources to strengthen government capacity where gaps exist. Development partners can further assist through training and technical support.

Also read: Faster market access tops priority list for agriculture

Challenge 2: Rethinking Free Trade in a Competitive World

Sihlobo notes that South Africa’s export diversification drive comes at a time when many other countries are also seeking to broaden their export markets given the disruption caused by the US trade policy. There is much stronger competition now than in the early 2000s.

South Africa needs to be more open to free trade agreements and prepared to make trade concessions. These decisions should be guided by thorough, independent research into the country’s broader economic interests, taking into account both current realities and long-term growth prospects.