Cape Town - Agriculture MEC Ivan Meyer has said that the African Continental Free Trade Area (AfCFTA) has presented South Africa, and particularly the Western Cape’s agricultural sector, with a host of opportunities for trade and investment.
Following the three-day 2023 AfCFTA Business Forum at the CTICC this week, South African agriculture and specifically produce from the Western Cape and its significance to the rest of Africa has come into sharp focus.
Meyer said: “With the turbulence in the world and the impact of the war in Ukraine, Africa is the next centre of agricultural growth, trade and investment and AfCFTA creates mutually beneficial opportunities to tackle poverty, hunger and food insecurity.”
Meyer said the African market offers excellent trade opportunities and is essential to South Africa and the rest of the world.
Data from the provincial Agriculture Department said: “Africa is the third-largest market of the Western Cape’s primary agricultural exports, accounting for R4.3 billion in 2021.
“The African market imports share of 41% for agricultural exports comes from South Africa. Furthermore, during 2012-2017, the average annual GDP growth increased by 4.3%, the second fastest-growing economy after Asia at 4.5%.”
Meyer said the Province’s aim was to unlock agricultural opportunities for the Western Cape Agricultural Sector across Africa.
This would include agricultural trade products, inputs, services, technology partnerships, information, skills development, training and logistics.
During the conference, AfCTFA secretary-general Wamkele Mene said trade in the agricultural business and industries sector was among issues being addressed by the agreement.
Wesgro Africa Desk head Michael Gamwo said Wesgro led about 15 trade missions to other African countries each year, and their priority markets were Nigeria, Ghana, DRC, Angola, Mozambique, Cameroon, Kenya, Cote d’ivoire, Zambia and Ethiopia.
“However, one should note that AfCFTA alone cannot significantly boost intra-African trade.
“Businesses still need to face many other non-tariff barriers such as port delays, lack of infrastructure, access to finance, forex shortages etc.”
Anchor Capital Investment analyst Casey Delport said high import duties and non-tariff measures (NTMs) remain significant barriers to intra-Africa trade.
“Thus, reducing tariffs and NTMs can unlock further trade opportunities in a market ripe with opportunity.”
Meanwhile, a Stellenbosch University academic, Desmond Annandale, said in his recent Master’s degree in Agricultural Economics that although agribusiness trade in Africa was expected to grow by up to 30% by 2050, the continent’s share in receiving SA’s agricultural exports had been decreasing.
On the question of whether AfCFTA presents an opportunity for South Africa, he said South Africa exports mostly lower-valued agricultural products such as maize, wheat and cane sugar in solid form to African countries while higher-valued agricultural exports such as wine, citrus, and other fruits ended up mostly in overseas markets, such as the EU and the UK.
He said AfCFTA was not a silver bullet to increase SA’s agricultural exports in Africa and it was therefore important to identify the countries and products that offer the best opportunities for us to increase South Africa’s agricultural exports.
mwangi.githahu@inl.co.za