The Southern African sugar sector

The Southern African sugar sector

The sugar industry has the potential to play a key developmental role in the Southern African Development Community (SADC) region. The current paper illustrates that the sugar industry in Southern Africa is extensive, making up slightly more than half of the continent’s sugar production. In addition, the sugar industry ticks many of the boxes of the most difficult development challenges: playing to comparative advantages; diversification (energy and bio-chemicals); benefiting small nations; and employing many workers, including low-skilled workers and those in rural areas.

Nonetheless, the regional political economy of the sugar industry is poised within a relatively unfavourable global market, characterised by heavy subsidies and a growing trend towards dumping from other parts of the world. However, this common anti-dumping concern among regional players has helped to cement the relationship across member states.

In the same way, a major concern in the regional sugar landscape is the impending decrease in the value of benefits from the EU’s preferential trade scheme - many of the SADC region’s producers are heavily reliant on the European markets.

The document suggests that:

  • the regional sugar producers would benefit from Angola and the DRC opening their markets to increased sugar imports from fellow regional producers
  • member states that have uncompetitive sugar industries need to find ways to increase efficiency and decrease production costs
  • there is a case for the region to increase NTBs in order to protect the regional producers from possible dumping by highly subsidised foreign sugar
  • the sugar industry is one of the most united sectors in the private space of the region; this  can help mobilising member states towards more beneficial regional agreements on sugar production and marketing
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