12 May 2023

by Nico van Burick

South Africa’s strong commercial ties with core regions in the world are put at stake by a questionable foreign policy that indicates support for Russia.

South Africa must be careful to not jeopardise its trade and investment ties that have been built up over the years with Western countries with its views on Russia, warned Francois Strydom, Chairperson of the Agricultural Business Chamber (Agbiz).

“We are concerned that South Africa’s policy stance on Russia is at odds with, or perhaps hostile to, countries with whom we have a long-standing commercial partnership, especially in Europe, Britain and America. Our policy is also not in line with other major economic powers such as Japan and South Korea.” 

South Africa’s agriculture sector exports about half of its production in monetary value.

Francois said that South Africa’s food, fibre and beverage value chains have grown significantly due to the increased demand abroad. In 2022, agriculture products worth a record amount of $12,8 billion (R235 billion) were exported, which was 4% more than the previous year. This export was to a wide variety of markets in Africa, Asia, Europe and the Americas. 

Francois believes that South Africa is jeopardising its trade ties with countries that are against Russia’s invasion of Ukraine. He has warned that the local presence of South Africa’s successful agricultural businesses should not be taken for granted. 

At an Agbiz board meeting, he said that agricultural businesses are committed to help fix South Africa, but they require credible partners to sustain it. The agricultural businesses are keeping the local economy going and creating jobs, but it needs leaders who need to accept liability for business conditions in the country.

“South Africa has some of the best and most resilient agricultural businesses in the world, but we must not take their resilience for granted. The conditions under which they work become more difficult every day. Rural municipalities provide poor service and businesses must spend millions every year to make up for it. This is not sustainable.”

Francois said that South Africa has agricultural businesses that can compete with the best in the world. “They have the skills, the knowledge, and the capital to work from anywhere in the world. The fact that they are still here shows their deep-rooted patriotism and ties to the country. This is not something that should simply be taken for granted, especially not by political leaders that need to position South Africa in a turbulent political policy environment.”

Clear foreign policy

Theo Boshoff, Chief Executive Officer of Agbiz, said that agricultural growth envisaged in programs such as the Agriculture and Agro-Processing Master Plan depends on the expansion of exports to new markets, while the existing export markets must remain open.

That requires a clear foreign policy from South Africa that will not make the country an outcast and will not cloud relations with prosperous countries that have long supported it. “The South African government needs to do the right thing and stand up against injustices in the world, while siding with strong economic partners.”

He also said that agricultural businesses need to work under increasingly hard conditions with poor service delivery, infrastructure, and energy supply, and increasing crime and instability. “The private sector reached out to the government and offered help. Agricultural businesses are willing and able to invest in power generation, rail transport and port infrastructure but they cannot do it on their own. Public and private partnerships are needed because these are highly regulated sectors.”

He said Agbiz speaks at the highest possible governmental level and although the attitude is favourable, there seems to be little urgency on the government’s part. “The entire economy is under great pressure and our efforts must get off the ground within a year. At the rate at which work is being done, it looks like some projects will only bear fruit years from now. We are concerned businesses will no longer be able to help the government by the time the red tape is cleared, and partnerships established.”