Saudi addition to BRICS favours South Africa

by TINTSWALO BALOYI JOHANNESBURG, (CAJ News) THE inclusion of Saudi Arabia in the Brazil, Russia, India, China and South Africa (BRICS) offers South Africa another avenue for diversifying the geographic destinations of its agricultural exports.BRICS membership of the Middle East country is effective January 2024, alongside Argentina, Egypt, Ethiopia, Iran, and United Arab Emirates.

There is no doubt that South Africa’s agriculture stands to benefit enormously from close cooperation with Saudi Arabia,” said economist Wandile Sihlobo.He is the chief economist at the Agricultural Business Chamber (Agbiz).

Sihlobo noted as chair of the recent 15th BRICS Summit, South Africa championed the need to deepen trade and investments amongst the BRICS countries, a point that other members overwhelmingly supported.The agribusiness working group of the BRICS Business Council raised the trade aspect and the need to resolve non-tariff barriers that would distort agricultural trade amongst member countries.

Initially, Sihlobo said, South African agribusinesses had their eyes on China and India as countries with reasonably higher tariffs on some agricultural products and a range of non-tariff barriers.With the inclusion of Saudi Arabia in the BRICS, South Africa would now look at three significant markets to broaden agricultural exports, he explained.

It is important for a country like South Africa to push for geographic diversification of trade, especially in the light of intensifying geoeconomics, tensions and the growing protectionism in traditional markets,” the economist said.The original BRICS countries are already an important agricultural market, he noted.

Data from Trade Map indicates they collectively import about US$320 billion of agricultural products from the world market in 2022.About 74 percent of the bloc’s agricultural imports are from China, 12 percent from India, 8 percent from Russia, 4 percent from Brazil and 3 percent from South Africa.Over the past five years, Saudi Arabia imported, on average, $21 billion of agricultural products.

South Africa is seen as a minor player in the Saudi Arabian agricultural market, accounting for less than 2 percent of all the imports.South Africa exported a record $12,8 billion agricultural products in 2022.The African continent was the leading market, accounting for 37 percent of the agricultural exports.

sia was the second largest agricultural market, accounting for 27 percent of exports, followed by the European Union, the third largest market, accounting for 19 percent.The Americas region was the fourth largest, accounting for 7 percent, and the remaining 10 percent went to the rest of the world, mostly the United Kingdom.

So, crucial markets such as these cannot be overshadowed by the BRICS+ possibilities,” Sihlobo said.He noted however the enthusiasm around BRICS+” was not at the expense of these key markets but an addition but South Africa is driven to expand and diversify its agricultural export markets.

This is a view or ambition of the South African government and the private sector. Therefore, the possibility of accessing new markets serves this national ambition,” the economist concluded.

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Source: CAJ News Agency