Wandile Sihlobo appointed Presidential Envoy on Agriculture and Land
In addition to his work as Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) and member of the Presidential Economic Advisory Council, Sihlobo is a Senior Lecturer Extraordinary at Stellenbosch University.
The importance of exports for SA agriculture’s long-term growth
By Wandile Sihlobo We do not emphasise enough the critical role of exports in driving South Africa’s agricultural growth. If one looks at the past three decades, this sector has more than doubled in value and volume. Indeed, the improvements in genetics and cultivars, amongst other interventions, are the primary catalyst that delivered this growth. But another critical catalyst is exports. This is a point I illustrated at length in my book, A Country of Two Agriculture. We now export roughly half of what we produce in South Africa’s agriculture, which was nearly US$14.0-billion in 2024. We are not even at capacity in terms of agricultural production, as we have roughly 2.5 million hectares of government-owned land that was previously commercially farmed, but now sub-optimally utilised. We also have capacity in the former homelands to increase agricultural output. When this land is finally released to deserving black farmers, with title deeds, paired with affordable finance, and partnerships from commodity associations, we will be able to drive the agricultural output to new heights. But we won’t be in a position to absorb that output in the domestic market. We will need to look at export markets. These exports are also key in ensuring that the farming businesses remain financially viable and can sustain jobs, and provide economic value to various communities. And yes, we don’t just export without first taking care of the domestic food needs. The exports are primarily a surplus. (The poverty issues we all are aware of in South Africa are mainly an income poverty issue, not necessarily an agricultural question). It is this reality I have just explained above that has always compelled me to speak more about the need to expand our export diversification efforts. I was encouraged on August 4, 2025, when I heard the key policy makers in the trade and international relations space pushing this message strongly. In a joint media briefing by South Africa’s Ministers of International Relations and Cooperation and Trade, Industry and Competition, the intent to rigorously pursue export diversification was made clear, with the ministers stating that: “We have been strengthening trade and investment partnerships with various trade partners. These efforts are bearing fruit, targeting markets across Africa, as well as in Asia, Europe, the Middle East, and the Americas.” The Ministers further stated that: “We are making significant inroads into new, high-growth markets across Asia and the Middle East, including the UAE, Qatar, and Saudi Arabia. These efforts are not only opening doors to new opportunities but also reinforcing our commitment to retaining the vital markets we already have.” With this clarity on the importance of export diversification, the South African agricultural community must rally behind this message. The first step must be to support the government with insights that further help them in engaging with the new markets and their prioritisation. This may not be something that people have on their minds, especially in the fast-evolving world of global trade. Thus, supporting research efforts on trade to provide up-to-date key insights that guide us in decision-making is vital. Another aspect we will have to assess is capacity readiness in the various government departments that are directly engaged in trade matters, specifically, the departments of International Relations and Cooperation and Trade, Industry and Competition. This also means that South Africa will have to adjust its approach on trade matters and be more open to Free Trade Agreements, understanding that there are tradeoffs they bring. You cannot want to win in all industries. There will be tough choices of tradeoffs that the policy makers will have to make. The countries we want to diversify to may also want to sell something from South Africa. This is particularly true today, where all countries are under pressure to expand their export markets given the disruption caused by the U.S. trade policy. The government senior officials in the trade department will also need to align with this new approach, which may be a slight shift in orientation from the established way of approaching trade policy matters. Ultimately, export diversification is key to the long-term growth of South Africa’s agriculture. We should keep this work going! Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. Sources: Agbiz | Daily Maverick | dtic
AfCFTA’s digital innovation challenge: Empowering Africa’s future trade
By Jessie Taylor The African Continental Free Trade Area (AfCFTA) is not just a landmark agreement designed to enhance intra-African trade; it’s also a significant driver of Africa’s digital transformation. In recent months, AfCFTA has focused on digital innovation, launching its Digital Innovation Challenge for 2025. This initiative aims to harness technology to streamline trade processes, reduce trade barriers, and empower small and medium-sized enterprises (SMEs) across Africa. The digital transformation of trade in Africa Technology is rapidly reshaping trade across Africa. As of 2024, Africa remains one of the world’s fastest-growing regions in terms of digital adoption. According to the International Telecommunication Union, mobile phone penetration across the continent exceeds 80%, and internet usage continues to rise exponentially. This digital shift is crucial because it is directly impacting trade dynamics. Traditional trade methods that relied on physical meetings, manual paperwork, and slow customs processes are increasingly being replaced by digital tools that simplify operations, increase transparency and lower transaction costs. AfCFTA, which came into effect on 1 January 2021, is the largest free trade area by membership in the world, encompassing 54 of the 55 African Union (AU) member states. The agreement aims to create a single continental market for goods and services, enhance the movement of capital and people, and ultimately increase Africa’s economic output by $3.4-trillion by 2030. However, in order to fully capitalize on the opportunities offered by AfCFTA, Africa needs to address several challenges that have historically hindered intra-African trade—such as bureaucratic delays, inefficient customs procedures, limited access to market information, and high transaction costs. The AfCFTA Digital Innovation Challenge, launched in 2025, is designed to promote the development of digital solutions that address these challenges. The goal is to leverage technology to make cross-border trade easier, faster, and more inclusive for businesses of all sizes, particularly SMEs that are often excluded from global supply chains due to cumbersome trade barriers. The challenge’s potential to reshape intra-African trade cannot be overstated. By encouraging digital innovation, AfCFTA is laying the groundwork for an Africa where trade flows freely across borders, businesses – no matter their size – can compete on equal footing, and the digital divide between countries is bridged. One of the most significant aspects of AfCFTA’s Digital Innovation Challenge is its focus on empowering youth and entrepreneurs. Africa has one of the youngest populations in the world. This demographic presents a vast potential for technological innovation and digital entrepreneurship. However, the lack of access to capital and business support remains a significant barrier to success. Technology’s role in empowering African entrepreneurs Technology’s role in trade is already visible in Africa through several successful initiatives. For instance, the launch of platforms like TradeDepot and Twiga Foods has revolutionized how SMEs access markets, connecting them with suppliers and buyers across countries without intermediaries. In the financial services sector, mobile money platforms such as M-Pesa have transformed how individuals and businesses make payments, driving economic inclusion for millions. Additionally, the use of blockchain technology is gaining momentum in Africa. Blockchain provides a decentralised, transparent ledger for transactions, which reduces fraud and enhances security. For trade, this means that goods can be tracked from the point of origin to delivery, offering a level of accountability and trust that has been lacking in traditional trade systems. By reducing transaction costs and increasing transparency, blockchain has the potential to unlock new opportunities for businesses in Africa to trade with each other and the rest of the world. The digital shift is crucial for unlocking the full potential of the AfCFTA. The initiative will also catalyse broader regional integration. By adopting digital tools, African countries will improve trade efficiency and foster greater economic integration. In the long term, digital trade is expected to stimulate economic growth by opening up new markets for African products, increasing competitiveness, and creating jobs in technology sectors across the continent. Moreover, these digital innovations will help Africa reduce its reliance on external markets and bolster intra-continental trade. According to a 2024 report by the World Bank, intra-Africa trade accounts for just 18% of the continent’s total trade. The AfCFTA aims to increase this number significantly, with projections suggesting that African exports could rise by up to 40% by 2040 as a result of reduced trade barriers and improved market access. By harnessing the power of technology, AfCFTA aims to eliminate barriers, reduce transaction costs, and empower the continent’s entrepreneurs. The results will be felt not just in the economic sphere but also in the form of a more connected, dynamic, and prosperous Africa, where technology plays a central role in shaping the future of trade. As the challenge progresses, Africa stands poised to emerge as a global hub for digital innovation and cross-border trade. Sources: AfCFTA Digital Innovation Challenge 2025 | World Bank | International Telecommunication Union
Building Africa’s future: The time for action is now
By Dr Terence G Sibiya The UN Economic Development in Africa report, released earlier this year, considers what African economies can do to strengthen resilience to trade risks caused by interconnected shocks across political, economic, energy, technological, and climate fronts. Many global crises, including the legacy of COVID-19, the war in Ukraine, and more recently tariffs which are being negotiated between African states and the US, introduce degrees of uncertainty, and necessitate greater resilience by African economies. Reliance on foreign markets, volatile commodity exports, high debt, and weak infrastructure have increased our vulnerability to economic shocks. As Reserve Bank Governor Lesetja Kganyago stated in an interview with Bloomberg earlier this year, the global economy faces economic fragmentation, and this raises the level of uncertainty. Strengthening our resilience is necessary to create a buffer against uncertain headwinds. While these are certainly challenges, they can also present an opportunity for Africa to build self-sufficiency and economic stability. The African Continental Free Trade Agreement (AfCFTA) is certainly one of the mechanisms we have to achieve this, with its potential estimated at $3.4-trillion, according to UN Trade and Development. AfCFTA is designed to unlock Africa’s economic strength from within, reducing dependency on external markets and enhancing regional trade networks. As things stand, intra-African trade accounts for just 16% of our total trade on the continent. Over 50% of the continent’s imports and exports are tied to just five economies, all outside of Africa. Meanwhile, only 16 of 54 African nations source more than 0.5% of intermediate goods regionally, which is a missed opportunity for value-added trade and manufacturing on the continent. Strengthening and diversifying Africa’s trade networks is key to building resilience, but infrastructure gaps, especially in transport and electricity, and non-tariff barriers, all pose hindrances to regional supply chains. Poor telecommunications connectivity also stands as an obstacle to trade growth. For example, road transport accounts for about 29% of the price of goods traded within Africa, compared to just 7% for those traded outside the continent. Without significant investment in infrastructure, trade liberalisation alone will not be enough to drive economic transformation. With these infrastructure backlogs and fiscal constraints in the public sector, attracting private sector capital has become essential to unlocking infrastructure expansion and improving cross-border connectivity, which in turn will drive economic growth and boost revenue for African nations. Governments alone cannot bridge this gap, which is why public-private partnerships (PPPs) are crucial in financing infrastructure and trade-related projects. Blended finance models (DFIs + commercial banks) will be instrumental in financing this transformation. The African Development Bank (AfDB) estimates that Africa requires between $130-billion and $170-billion annually for infrastructure, but there remains a $100-billion funding gap. The private sector must step up to help bridge this gap by leveraging its capital and expertise to fast-track critical projects. The leveraging of solid blended finance models will also be critical in the execution of necessary projects. Accelerating economic integration requires AfCFTA member states to collaborate with the private sector to unlock business opportunities and tackle trade and investment barriers. While the private sector stands ready to invest in infrastructure, logistics, and renewable energy, governments will need to implement reforms that encourage this private sector investment and financing. In particular, regulatory frameworks must be harmonised across countries to create a stable and predictable business environment that fosters investor confidence. As the African Union (AU) states in its Agenda 2063, success requires political leadership, vision, and commitment as well as the capacity to implement change. As the Group Managing Executive for Nedbank Africa Regions, I recognise that bridging the gap between policy ambition and real-world execution requires financial institutions to lead from the front in all our markets. Our commitment goes beyond financing. We actively support cross-border trade, investment facilitation, and financial inclusion, having sustainable financing at the core of our business and strategy. Our current footprint in Africa includes operations in Eswatini, Lesotho, Mozambique, Namibia and Zimbabwe as well as representative offices in Kenya and Ghana, with plans to expand our presence over time. Nedbank offers banking and related services across NAR for retail clients, small and medium enterprises, larger businesses and corporates, as well as institutions. We offer a full range of banking services, including transactional, lending, deposit-taking, card, bancassurance and selected wealth management offerings. These place us at the forefront of promoting sustainable economic growth in Africa. Africa’s economic trajectory is increasingly influenced by global trade and policy frameworks. South Africa’s G20 Presidency, under the theme of “Solidarity, Equality, Sustainability,” presents an opportunity to ensure that Africa’s economic priorities are not just heard but acted upon on the global stage. President Cyril Ramaphosa has underscored the urgent need for climate-resilient funding, responsible debt relief, and the sustainable development of mineral resources. These are not abstract policy considerations. They have real and immediate implications for businesses, from capital flows to infrastructure investment and global competitiveness. This Africa Month, we declare that the time for planning is over – the time for action is now. We must make the most of the opportunities that the AfCFTA presents. AfCFTA’s success will not be measured by rhetoric but by the tangible progress we make in building a truly integrated, economically empowered Africa. Let us move beyond ambition and into execution because Africa’s future will not build itself. We must build it together. Terence G Sibiya is Nedbank’s Group Managing Executive: Nedbank Africa Regions
The reality is that South Africa’s agriculture is thriving
By Wandile Sihlobo Since US President Donald Trump commented about his “imaginary” land grabs in South Africa, some among us have started pushing a misleading narrative that agriculture is under pressure and has been failing for a while. The inept municipalities, poor road infrastructure, stock theft, and port inefficiencies all contribute to this narrative of failure and despair. Stories of the failings of land reform farms also add to this sentiment of regression in agricultural progress. But this narrative is far from the reality of the South African farming sector. Regardless of how experts feel about the state’s capacity and the government’s policy stance since the dawn of democracy, the one undeniable fact is that the sector has grown tremendously – and indeed, not failing. Data from the Department of Agriculture shows that domestic agricultural output in 2023/24 had more than doubled the size in 1994. A few sectors did not drive this expansion, but it has been widespread; livestock, horticulture and field crops have all grown enormously over this period. The higher production levels have mainly been underpinned by new production technologies, better farming skills, growing demand (locally and globally) and progressive trade policy. The private sector has played a major role in this progress. South Africa was the world’s 32nd largest agricultural exporter in 2023, the only African country in the top 40 in value terms. This was made possible by a range of trading agreements the South African government had secured over the past decades, the most important ones being with African countries, Europe, the Americas, and some Asian countries. The African continent and Europe now account for about two-thirds of South Africa’s agricultural exports, and Asia is now also an important market. The agricultural subsectors that have contributed most to this progress in exports are fruits, wine, wool and grains. South Africa now exports roughly half of its agricultural products in value terms, reaching a record $13.2-billion in 2023, according to data from Trade Map. The friction surrounding SA-US relations has added to the view that South Africa may be pushed out of AGOA and that agriculture would be under pressure in such a scenario. However, the reality is that South Africa’s agricultural exports directly to the US account for only 4% of the overall agricultural exports. And even if South Africa could be out of AGOA, that wouldn’t mean a blockage, but there would be tariffs of around 3%, reducing the competition of South African products. To be clear, I am not minimising what is at stake; the agricultural products South Africa exports to the US include citrus, nuts, wine, grapes, and fruit juices, amongst other products. For these industries, an exclusion from AGOA would be negative, but it would not be a collapse of SA agriculture. Beyond exports, the increase in agricultural output over the past 30 years is why South Africa is now ranked 59th out of 113 countries in the global food security index, making it the most food-secure country in sub-Saharan Africa. I recognise that boasting about this ranking when millions of South Africans go to bed hungry daily may ring hollow, as I pointed out after a few presentations where I cited these statistics. However, it is essential to note that many South Africans lack access to food due to the “income poverty challenge” rather than lack of availability due to low agricultural output, as in other parts of Africa. South Africa produces enough food but does not export all of it. A lot is kept domestically for the local market. To address poverty, South Africa must ensure employment and that households have sufficient income to buy food. The disappointing part of South Africa’s agriculture is the exclusion of black farmers. As I argued in my recent book, A Country of Two Agricultures, “Nearly three decades after the dawn of democracy, SA has remained a country of ‘two agricultures’. On the one hand, we have a subsistence, primarily non-commercial and black farming segment; on the other, we have predominantly commercial and white farmers.” The book adds that: “the democratic government’s corrective policies and programmes to unify the sector and build an inclusive agricultural economy have suffered failures since 1994. The private sector has also not provided many successful partnership programmes to foster black farmers’ inclusion in scale commercial production. It is no surprise that institutions such as the National Agricultural Marketing Council estimate that black farmers account for less than 10%, on average, of commercial agricultural production in SA.” This lacklustre performance by black farmers in commercial agriculture cannot be blamed solely on historical legacies. The democratic government is also blamed for its inability to support the development of the new crop of farmers. Fortunately, not all is lost. Plans and programmes are in place to sustainably increase the number of black farmers in the sector. The agriculture and land reform plants are not aimed at replacing the existing farmers with new black farmers. The government has around 2.5 million hectares of land to distribute with title deeds to black farmers. This will be “growing the agricultural piece” without threatening the property rights in the country. South Africa’s agriculture is robust and has room for growth. As we progress toward supporting the sector, there must also be room for young people to be included. Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa (Agbiz) Sources: The Conversation | Democratic Alliance | DALRRD | Economist Impact | The Conversation