The potential use of South Africa’s Simon’s Town naval base by Russia or China was the biggest cause of tension between South Africa and the United States, according to analyst and former ambassador Dr Kingsley Makhubela.
The potential use of South Africa’s Simon’s Town naval base by Russia or China was the biggest cause of tension between South Africa and the United States, according to analyst and former ambassador Dr Kingsley Makhubela.
Dr Makhubela pointed out the rising strategic importance of the Cape sea route because the Middle East conflict was diverting ships around the Cape.
He also said in one of his regular interviews with Moneyweb that the US might use its African Growth and Opportunity Act (AGOA) as a stick against South Africa, and it would probably exclude South Africa from AGOA’s benefits of duty-free access to US markets.
Dr Makhubela is a director of RiskRecon, a consultancy specialising in risk management, conflict resolution and economic and political analysis. He recently joined FairPlay as a strategic advisor.
Asked about the new sanctions imposed on unnamed South African officials, and a warning from the local US ambassador that “this is only the start” he said “it doesn’t make sense to attack South Africa in this manner and continue to provide these (AGOA) concessions.”
He noted that the US bought 73% of its platinum from South Africa, and large quantities of iron ore. These were still admitted into the US duty-free, because the US needed them.
However, he saw the potential use of the Simon’s Town naval base by Russia and China as the key issue between South Africa and the US. It was an issue that started before the Trump administration.
“I think for quite some time, the US has been eyeing this. You remember, the US has had an intention to set up military bases in South Africa, and South Africa rejected that.
“Given the geostrategic location of the Cape of Good Hope and the access to Asia and South America, even to navigate through Europe, it’s what is at stake.”
Dr Makhubela said South Africa’s “big mistake” was to believe the country’s tense relationship with the US was because of President Donald Trump.
“I don’t think it’s Donald Trump, it’s a systemic issue,” he said.
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Sugar producers have accused South African retailers of failing to abide by a commitment that 95% of the sugar they sell would be local.
Sugar producers have accused South African retailers of failing to abide by a commitment that 95% of the sugar they sell would be local.
In a statement, Higgins Mdluli, chairman of SA Canegrowers, said imports put local jobs and livelihoods at risk.
Rising sugar imports had resulted in a 20% drop in sales this season, even though South Africa produced enough sugar for the local market.
Retailers had committed in terms of the industry’s master plan to source 95% of their sugar from local producers. However, “evidence on local retail shelves shows that they are not delivering on this commitment”.
He took issue with purchases from eSwatini, whose sugar exports enter South Africa duty-free. Retailers were wrong to argue that eSwatini sugar did not count as an import because it came from a neighbouring country.
“Local means South African,” he said.
“South Africa produces enough sugar to meet local demand. Retailers who sell sugar produced in other countries are exporting jobs and not sticking to their own commitment to support local sugar: a commitment made in South Africa, under a plan by the South African government, to South African sugar,” said Mdluli.
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Middle East countries, particularly Saudi Arabia which South Africa sees as a potential poultry export market, are increasing their own poultry production.
Middle East countries, particularly Saudi Arabia which South Africa sees as a potential poultry export market, are increasing their own poultry production.
The trend is reported by WATTPoultry, quoting research by Nan-Dirk Mulder of Rabobank.
Poultry remains a preferred protein in the Middle East, where Rabobank reports production is expected to rise by 2 million metric tons by 2035. Turkey, Iran, Saudi Arabia, Israel and Iraq are the region’s top producers.
Mulder reports a stronger focus on self-sufficiency as demand for chicken grows.
“In Saudi Arabia, for example, poultry meat self-sufficiency has risen from 39% in 2019 to 68% today, driven by government strategy and industry support. Other governments have also launched programs to boost self-sufficiency. In the UAE, the National Food Security Strategy 2051 aims to ensure affordable access to safe, nutritious food.
“However, despite these efforts, self-sufficiency levels for poultry meat still vary widely by country, and approaches differ,” Mulder said.
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FairPlay has countered the simplistic argument from chicken importers that the South African poultry industry’s current profitability means import tariffs are no longer needed.
FairPlay has countered the simplistic argument from chicken importers that the South African poultry industry’s current profitability means import tariffs are no longer needed.
Two of South Africa’s largest poultry producers, Astral Foods and Rainbow Chicken, have announced substantial increases in profitability this year. This has prompted chicken importers to join the United States in calling for an end to South Africa’s general import tariffs on poultry.
General, or Most Favoured Nation (MFN) tariffs, are separate from and in addition to the anti-dumping duties that apply to nine major poultry producing countries.
In an article in The National, the new publisher of Business Report which appears in newspapers in South Africa’s major centres, FairPlay founder Francois Baird focused on the links between tariffs, weather and profitability.
“Profitability is a key consideration when tariffs are considered by South Africa’s trade regulator, the International Trade Administration Commission (ITAC),” he said.
“Without profitability, there can be no investment, no expansion and no job creation.”
When it increased MFN tariffs in 2020, ITAC noted that the poultry industry was globally efficient “but has experienced profitability challenges due to constantly being undercut by low priced and opportunistic dutiable imports”.
Profitability in the poultry industry is hugely influenced by the price of grain, which makes up around 70% of the cost of producing a chicken.
At the moment, grain prices are low after two years of good rains and record harvests. The El Nino weather phenomenon, which brings hotter and drier conditions to Southern Africa, was forecast to hit the region this summer.
“There are already projections that this year’s El Nino could be the worst in living memory,” Baird said.
“A combination of reduced maize plantings, extreme heat and possibly drought would reduce grain harvests. Despite stockpiles from previous harvests, grain prices would inevitably rise. Poultry profit margins could come under severe pressure. Small-scale farmers in particular could again face contraction and job losses.
“Simply put, the good years must offset the bad years in providing affordable cheap chicken sustainably to the consumer and ensuring national food security.”
In addition, removing MFN tariffs could expose the local poultry industry to hugely increased volumes of chicken imports from foreign producers who enjoy direct and indirect subsidies, while South African producers are not subsidised at all.
Chicken importers stand to gain financially from increased imports. They present a simple argument, but the answer is far more complicated.
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Some interesting suggestions for increasing South Africa’s trade with the United States were raised during a FairPlay trade webinar.
Some interesting suggestions for increasing South Africa’s trade with the United States were raised during a FairPlay trade webinar.
The webinar, hosted by FairPlay founder Francois Baird, focused on the future of the Africa Growth and Opportunity Act (AGOA) and its benefits for African countries. It also branched out into President Trump’s trade and tariff policies, and how things might change after 2028.
Two international experts said that, in addition to direct contacts with the US government, there were ways that South Africa could make its case in the US capital and in various US states.
South Africa should make more use of its embassy in Washington to showcase South African goods, said Prof Diana Furchtgott-Roth an adjunct economics professor at both the George Washington University in Washington DC and University of the Free State in Bloemfontein.
“Your embassy can be used as a tool of trade promotion, as other embassies are,” she said.
“Have a big party where you display your delicious chicken, your wonderful citrus.”
Trade expert Andrew Hale said the South African government, and individual South African industries, should consider hiring lobbyists to promote their issues to the US government, and to increase trade with some of the 50 US states.
Hale said that, while trade was regulated at a US government level, countries were increasingly establishing offices in individual US states, engaging in bilateral negotiations with them and establishing memorandums of understanding. This could end up with the state encouraging the US government to have more harmonious relations with that country.
Prof Diana Furchtgott-Roth added South Africa should not only seek to sell to US states, but it should also see what those states wanted to sell to South Africa. This could include minerals, manufactured products or medical equipment. A trade relationship, she said, “goes two ways”.
Food for thought for Roelf Meyer, South Africa’s new ambassador to Washington. And perhaps two additions to his guest list?
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A private United States business body advocating stronger trade ties with Africa has called for an extension of “at least 10 years” of the Africa Growth and Opportunity Act (AGOA) trade preference legislation.
A private United States business body advocating stronger trade ties with Africa has called for an extension of “at least 10 years” of the Africa Growth and Opportunity Act (AGOA) trade preference legislation.
The last AGOA 10-year extension expired in 2025. This month, the Trump administration renewed it until the end of 2028. The US legislation gives qualifying African countries duty-free access to US markets, but its benefits have largely been negated by the Trump administration’s series of worldwide tariffs.
The US-based Corporate Council on Africa (CCA) said in a statement that the two-year extension was welcome, and “provides an important measure of certainty for businesses, investors, workers and governments across the United States and Africa”. However, a longer time period was needed.
AGOA had delivered two-way benefits since its inception, supporting American companies, workers, and consumers while advancing economic growth and diversification across Africa.
“In recent months, CCA has intensified its advocacy and engagement around AGOA’s renewal, including briefing the African Union and members of the African diplomatic corps, meeting with African Ministers of Trade, consulting with key U.S. Government officials in the Administration, and engaging Members of Congress and congressional staff across party lines.
“While this two-year extension is an important and welcome step, CCA will continue to advocate for a longer-term renewal and modernization of AGOA, specifically, a reauthorisation of at least 10 years to provide the certainty businesses need to make long-term investment decisions, build supply chains, create jobs, and expand commercial relationships across the continent,” the council said.
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