Lethabo Sithole

WE ARE ALREADY SEEING ENCOURAGING ORDERS FOR MY NEW BOOK, “BALANCE AND REASON”. The book will be available nationwide from November 9 in all major bookstores and on ebook platforms. You can also order it and learn more at the link below.

ANOTHER WAY OF VIEWING THE AGOA CONVERSATION Amid everything happening in South Africa, there are also conversations about the outcome of the review of the African Growth and Opportunity Act (AGOA), and whether South Africa will be included or graduate out (excluded). While we are now in a different political climate, I think it’s important to remember that such conversations about South Africa’s eligibility to be part of AGOA have been happening for a while. For example, back in 2014, the focus, amongst other things, was on the reality that South Africa is an upper-middle-income country and should have graduated from AGOA to a full bilateral trade agreement with the U.S. Of course, we had our own complications, both because of the Southern African Customs Union (SACU), which we can’t sign bilateral trade agreements without the region, and because we lobbied to keep benefiting from this unilateral approach (AGOA). Looking back, if we had found a way to graduate out of AGOA, as we were pressured to do then, and started conversations about a trade agreement, we would be in a different climate than what we are seeing now. Of course, this doesn’t mean countries with trade agreements are spared from drastic changes in U.S. trade policy; we see those changes affecting countries like Canada. Still, we wouldn’t be in this environment of heightened anxiety among various stakeholders in our society. Beyond these historic events, I think there is also confusion about graduating from AGOA. Others frame it as if it would mean a complete ban from the U.S. market, which is not the case. Simply put, if South Africa were excluded from AGOA, the country would face an additional Most Favoured Nation tariff of around 3.4% on top of the existing tariffs the current U.S. Administration added to various countries. Currently, some South African products enter the U.S. market at 12.5% tariffs (Liberation Day tariff). Without AGOA, these tariffs would rise to 15.9%, slightly reducing the competitiveness of some South African products in the U.S. market. Still, one could argue that while this would be a challenging path, it would not necessarily be as catastrophic as we have faced in the past, when we faced much higher U.S. tariffs and still managed to compete. Consider South Africa’s agriculture: in 2025, the South African farming sector faced tariffs of around 30%. Still, agricultural exports to the U.S. were strong. South Africa’s agricultural exports to the U.S. in 2025 totalled US$504 million, down 3% from the previous year. During the higher “Liberation Day Tariffs”, some South African agricultural exporters took advantage of the 90-day pause in the second quarter of 2025 and exported more volume than usual. After this pause, exports cooled in the third and fourth quarters of 2025. Notably, South Africa’s agricultural exports to the U.S. fell 11% in the third quarter of 2025, compared with the same period in 2024, to US$144 million. In the last quarter, South Africa’s agricultural exports to the U.S. fell sharply by 39% to US$81 million. Still, the overall annual exports were encouraging. Even this year, South Africa’s agricultural exports to the U.S. were strong. For example, South Africa's agricultural exports to the U.S. increased by 56% from the first quarter of 2026 to the second quarter of 2026, to US$123 million. The decline in U.S. tariffs, from 30% to 12.5%, among other factors, has been the major contributor to the increase in South Africa’s agricultural exports to the U.S. The U.S. remains an important market for South African agriculture, accounting for about 4% of our agricultural exports. Main exports include citrus, berries, grapes, raisins, wine, fruit juices, apples, pears, apricots, and nuts. Again, the issue of South Africa's possible graduation from AGOA must be viewed in context and may not mean a catastrophe. This is not to understate the impact some industries may feel as the increase in tariffs slightly reduces their competitiveness. Still, we must manage the sentiment and narrative around this issue well. Above all, this yet again reminds us of the need to work hard to diversify South Africa’s export markets to growing regions such as Asia and the Middle East. But export diversification must be framed correctly; it is not a replacement for the U.S., EU, UK, Africa, and other markets. These remain key, and we must work to retain our access to them. --Wandile Sihlobo is the Presidential Envoy on Agriculture and Land. He is also the chief economist of the Agricultural Business Chamber of South Africa and a senior research fellow in the Department of Agricultural Economics at Stellenbosch University.