By: Ovizikhungo Sicwetsha - Head of Transactional Banking for the mid-corporate segment at Nedbank

Against a backdrop of geopolitical fragmentation, rising protectionism, and shifting demographic patterns, South Africa's agricultural sector is both exposed to global volatility and uniquely positioned to benefit from new growth corridors.

From a banking perspective, the central question is increasingly about financing: how capital flows, how risk is priced, and how financial institutions enable real economic growth in an environment defined by uncertainty.

Finance is the enabler of agricultural competitiveness

Speaking at a Nation in Conversation panel discussion on global trade at NAMPO last month, I framed the discussion through the lens of financial system resilience and adaptability in an increasingly unpredictable trade environment. My core message was simple: Agriculture's future growth will depend not only on production capacity or market access, but on the ability of financial institutions to structure, fund and derisk growth in a fragmented global system.

A key opportunity lies in the African Continental Free Trade Area (AfCFTA) as a long-term catalyst for intra-African trade expansion, particularly given the significant share of South Africa's agricultural exports already flowing into the continent. However, unlocking this potential will require more efficient payment systems, reduced currency friction, and greater openness to local-currency settlement structures that reduce dependency on hard-currency cycles.

At the same time, trade uncertainty translates directly into credit tightening. When global trade rules become less predictable, banks are required to reassess risk models, which can lead to more conservative lending and higher funding costs for farmers and agribusinesses. Geopolitical instability is therefore not abstract – it is priced directly into working capital, investment appetite, and long-term expansion decisions.

Despite these pressures, I am confident in the strength and sophistication of South Africa's banking sector. It is positioned well to support agricultural transformation, particularly through financing aligned with sustainability transitions such as renewable energy, water efficiency, and climate resilience.

The end of predictability in global trade

As the broader discussion highlighted, the post-war global trading order is under strain. Recent changes in US tariff policy suggest that the global trade system, based on agreed rules and overseen by the World Trade Organization, is weakening.

History reminds us that protectionist cycles rarely deliver their intended outcomes. From the Smoot-Hawley Tariff Act to the Chicken War between the US and Europe, such interventions often result in unintended consequences, including reduced innovation, market distortion, and long-term inefficiencies in food systems.

What we are witnessing is not simple deglobalisation, but rather re-globalisation: a reconfiguration of trade flows as countries and regions diversify away from traditional centres of economic importance. Africa is expected to become more significant over time, driven by demographic expansion as developed economies face population stagnation and ageing labour forces.

For South Africa, the risk is that more protectionist policies could make it harder to keep up with global changes, especially since modern farming increasingly depends on international supply chains for the likes of semiconductors and advanced agricultural technology.

Non-tariff barriers are also becoming more important, especially environmental, social, and governance (ESG) rules from the European Union, which increasingly act like trade restrictions for agricultural exporters.

Export growth but constrained market expansion

South African agricultural exports have grown significantly from under $2 billion in 2000 to more than $15 billion in 2025. However, this expansion has not been matched by a meaningful broadening of trade agreements or market diversification.

There is clear potential to expand further into Asia and the Middle East, where rising incomes and food demand create opportunities. Yet non-tariff barriers, limited negotiating capacity, and weak policy coordination continue to constrain our access to these markets.

A more deliberate and coordinated approach to trade diplomacy is required, including stronger collaboration between government and the private sector, and greater investment in trade policy expertise.

Africa is the next frontier, although not yet fully integrated

Intra-African trade remains one of the significant long-term opportunities for South African agriculture. Around 40% of agricultural exports already go to the continent, but most value is concentrated in southern Africa, with limited market penetration into West and East Africa.

This reflects ongoing non-tariff barriers, including regulatory inconsistencies, restrictions on genetically modified products, and imbalanced institutional capacity across trading partners. The result is a fragmented continental market that has yet to achieve its full integration potential.

At the same time, emerging growth nodes such as oil-rich southern African (Angola and Mozambique) and East African countries (Ethiopia, Rwanda, Kenya, and Tanzania) demonstrate that parts of the continent are undergoing meaningful transformation, driven by infrastructure development and resource investment.

Competitiveness as the decisive variable

What was emphasised in the discussion is that competitiveness ultimately determines trade outcomes. South Africa’s agricultural sector has benefited from strong private investment over the past decade, particularly in grains, oilseeds, and agro-processing, but structural constraints increasingly weigh on growth.

Infrastructure inefficiencies, unreliable electricity supply, and logistical bottlenecks – particularly at our ports – continue to erode global competitiveness. These challenges are compounded by high unemployment and inequitable human capital development, weakening South Africa's bargaining position in global trade negotiations.

The conclusion is clear: Protectionism is not a sustainable long-term strategy for a small, open economy that has already outgrown its domestic demand base. The emphasis must instead shift to improving productivity, reducing trade friction, and strengthening institutional coordination.

Agriculture's pivotal moment

South Africa's agricultural sector now faces a conundrum. On one side lies a world of intensifying fragmentation, policy unpredictability, and rising trade barriers. On the other lies substantial opportunity: expanding African markets, rising global food demand, and the potential for technology-driven productivity gains.

It is not protection, but competitiveness – enabled by finance, supported by policy coherence, and underpinned by infrastructure – that will determine whether South Africa's agricultural success story continues to scale or begins to plateau in a more fragmented world.