Working Paper
Agro-processing, value chains, and regional integration in Southern Africa

Regional integration in Africa is underway but ongoing progress requires that the gains are widely spread. South Africa’s huge regional trade surplus in manufactured goods is already leading to protectionist pressures in neighbouring countries.

Agro-processing is a large sector, which is widely regarded as having significant potential, but the export performance of the region has been quite poor if South Africa is excluded.

Intra-regional trade is dominated by South Africa’s exports to the region. The share of processed goods in agricultural trade has increased but only modestly.

Regional value chains are failing to include the small economies of Southern Africa. Constraints include tariff and non-tariff barriers, weak infrastructure, demanding quality standards as well as weakly developed local suppliers.

Policies to promote the development of suppliers outside of South Africa are required along with more generic measures such as improvements in the regulatory and investment environment, and better infrastructure.