Maroc - dailynews.co.za - Business - Aujourd'hui 07:01

South Africa-Mozambique economic ties weather political storm

By Thabile Nkunjana, Moses Lubinga, and Victor ThindisaThere is no reason to be alarmed about trade between South Africa and Mozambique in the foreseeable future. Concerns over trade between South Africa and Mozambique were raised following the post-election violence that disrupted the movement of goods in and out of Mozambique.Mozambique is the third-largest market in Africa for South Africa's agricultural exports, with a market share of 14% in 2023 valued at R12.8 billion. It is ranked after Botswana and Namibia, whose agricultural exports are valued at R14.5bn (16%) and R13.2bn (15%) of the market respectively with reference to 2023. This demonstrates the significance of Mozambique as a South African market.In terms of South Africa's agricultural exports, Mozambique is ranked sixth globally as of 2023, accounting for 5% of $13.2bn (or R244bn).Although attention and analysis are currently confined and focused to South Africa and Mozambique, the continued upheaval in Mozambique also poses concerns to several other countries.For instance, in 2023, Mozambique exported R2bn worth of goods to the United States, primarily nuclear reactors, ores, and other precious metals.Among other countries, Mozambique exported goods valued at R3.1bn to Zimbabwe, R941.8 million to Botswana, R889.1m to Malawi, and R367.9m to Eswatini in 2023.Citrus, one of the South Africa's biggest and most exportable agricultural products, is expected to be ready for export in May 2025. In 2023, citrus exports were valued at $1.8bn.Due to inefficiency challenges at various ports, Mozambique is playing a vital role in exporting some citrus and various produce from South Africa to the rest of the world.Consequent to the partnership and collaboration with the business community, a variety of equipment is being delivered at various ports to improve operational efficiencies. The port's conditions should improve significantly in the latter months of 2025 or early in 2026.While as of January 12, 2025 there was a smooth flow of products between South Africa and Mozambique, a comparative trends analysis between August and November 2023 and 2024 suggests that South Africa’s agricultural exports declined by 8.2% in 2024 unlike a 9.5% rise recorded in 2023. During 2023, monthly growth of South Africa’s top five exports to Mozambique was registered for non-alcoholic beverages, and “groats and meal of maize”.Notably, nuts and oil cake increased as compared to the same period in 2023. With regards to agricultural imports, a comparison between 2023 and 2024 for the same months shows a 39% decline in 2024 yet imports increased by 9.1% in 2023. For all the five most imported products - fresh bananas, wheat residues (bran, sharp), fresh guavas, and cane molasses, there was a monthly growth of decline in 2024 unlike in 2023.Despite the slight decline in the monthly trade for some agricultural products when compared to the trade performance in 2023 (August – November), the trade situation raises no reason to cause alarm. However, continuous monitoring of the political unrest is advisable to proactively mitigate trade challenges.Prolonged political instability in Mozambique may also have adverse repercussions for the bordering Southern African Development Community (SADC) countries and of course trade.Thousands of people have already been forced to flee nearby countries. Nearly 8 000 Mozambicans fled to Malawi and Eswatini to seek safety.The Malindza Refugee Reception Centre in Eswatini, which is currently very overcrowded, was providing refuge to the newcomers. Arrivals in Malawi report escaping looting and violence, hiding in the jungle, and finally bridging the Shire River.Delivering supplies and repairing vital infrastructure damaged by Cyclone Chido have been made more difficult by the ongoing insecurity.While the security situation has impeded humanitarian access in numerous regions of Nampula and Cabo Delgado, violence and looting have interrupted efforts to provide food and shelter in several districts of Cabo Delgado. Thousands of people may continue to experience food insecurity as a result of this, which has grave consequences for those who are already at risk.As was already said, monitoring is essential while trade is ongoing to make sure that the appropriate actions are made in the event that a need arises.Thabile Nkunjana is a senior economist at the NAM, Moses Lubinga is a manager under agro-food chains, and Victor Thindisa is a senior manager of MERC. The opinions expressed by authors are their own and do not necessarily reflect those of their employers. BUSINESS REPORT