Swaziland’s agricultural sector and not just the country’s garment industry stands to suffer as Swazi products are no longer given tax-free access to the US market under the African Growth and Opportunities Act (AGOA). 

The citrus growers of the Lubombo Region hope to export to America, and have already filed an application with the US Government to start the process.

“Swaziland does not have access to the USA and so no fruit is sent there at the moment. South Africa only has access from the Northern and Western Cape,” said Justin Chadwick, CEO of the Citrus Growers Association (CGA) in Durban. 

The CGA markets citrus grown in South Africa, Swaziland and Zimbabwe, finding new markets and conducting research on transportation and trade laws. Citrus growers pay a fee to CGA and are assisted to expand their business. At present, the CGA is lobbying Washington to extend AGOA beyond the year 2015 when the trade pact must either be renewed or end. Swaziland was de-listed from countries that are eligible for participation in AGOA in May.

“Expulsion was a setback,” Chadwick admitted. 

“Both Swaziland and the rest of South Africa that are no longer shipping to the US have sent in market access applications (to Washington),” said Chadwick. Southern African citrus is sold worldwide. The main markets are Europe, the Middle East and Russia. Because citrus is harvested in winter – June and July are the peak shipping months for Swazi citrus – this means Swazi citrus can fill the gap when it is summer in the US. Currently, the US imports most of its fresh citrus from South America, where like Swaziland it is winter when it is summer in America.

Approval

Swaziland’s citrus growers may get approval to sell citrus in the US. However, they will have to pay import duties. AGOA allowed Swazi products to be imported duty-free. Because these costs are passed on to the buyer of the citrus, Swazi citrus will be more expensive and lose a price advantage it had under AGOA.

Swazi growers had intended to expand operations once they can sell to America. Now they will reassess those plans. It is not known how much the agriculture sector stands to lose, or the exact number of jobs that will not be created. This comes at a time when Swaziland’s citrus industry is facing declining productivity and sales.

In its most recent annual report, the Central Bank of Swaziland noted that the size of areas devoted to citrus cultivation declined “significantly,” from 1 770.6 hectares in 2011 to 1 402.2 hectares in 2012, resulting in citrus production ‘plunging’ one third from 78 418 tonnes in 2011 to 53 013 in 2012. Not even a cheaper lilangeni which makes Swazi exports less expensive to buy overseas helped sales much. Export volumes dropped by one-fifth to 28 741 tonnes in 2012, which the bank describes as a ‘massive fall.’ Export revenues dropped from E103.5 million in 2011 to E87.7 million in 2012.

“We were pinning our hopes on the US market to boost sales. The loss of AGOA does not mean we cannot sell Swazi citrus to the US but we don’t have the price advantage anymore,” said one grower.