The Southern African Development Community (SADC) is a Regional Economic Community comprising 16 Member States: Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic Tanzania, Zambia, and Zimbabwe. There is an improvement in the Southern African Development Community (SADC) intra-trade, which has risen to 23%, up from 19% in 2021, according to the latest African Union (AU) Regional Integration Report (2021). This improvement reflects the impact of ongoing efforts to roll out various provisions of the SADC Protocol on Trade, including implementing simplified trading arrangements that have increased informal cross-border trade covering agricultural and non-agricultural commodities. Southern Africa remains the main driver of intra-African trade, accounting for 41.4% of all trade between the continent’s countries over the past year.
Southern Africa will continue its low-growth trend, with real GDP growth projected to increase from an estimated 1.6 percent in 2023 to 2.2 percent in 2024, with a slight improvement to 2.6 percent in 2025. This sluggish performance reflects the ongoing economic stagnation in South Africa, the region’s largest economy, where growth is an estimated 0.8 percent in 2023 and is projected to increase marginally to 1.1 percent in 2024 and 1.6 percent in 2025. Sustained subdued growth in South Africa, which accounts for 60 percent of the region’s total output, is a consequence of ailing physical and social infrastructure, a protracted electricity crisis that lowered the productive capacity of firms, and constrained domestic demand.
South Africa relies on the continent for about 63.8 percent of its crude oil imports, with 47.9 percent sourced from Nigeria. Surprisingly, Nigeria surpasses Saudi Arabia as the primary global supplier of crude oil to South Africa. Energy products constitute a significant portion, about 55 percent, of South Africa’s imports from Africa, showcasing a heavy reliance on this sector. Conversely, South Africa’s exports to the continent are more diversified, reflecting the complexity of its industrialized economy. Machinery, vehicles, and nuclear reactors dominate its exports, alongside fuel and fuel products, precious stones, and machinery to key regional partners like Mozambique and Botswana. Plastic products are also significant exports to countries like Nigeria. In contrast, Mozambique and Botswana primarily export pearls, live animals, machinery, meat, fish, and dairy products, comprising around 60 percent of their exports to South Africa. Notably, over 35 percent of Zimbabwe’s exports to South Africa include mineral fuels, tobacco, salt, and coffee.
According to the Afreximbank, Southern Africa boasts an export potential to the rest of the continent valued at approximately US$33 billion. The products exhibiting the greatest export potential are primarily industrial goods, including machinery, electricity, motor vehicles and parts, minerals, pearls and precious stones, beauty products, metal products, ferrous metals, chemicals, food products, and plastics and rubber. Together, these products collectively represent about 73.3 percent of the region’s total export potential. This emphasis on industrial products underscores the region’s capacity for intra-African trade and highlights the importance of diversifying export portfolios.
The dominance of South Africa’s economy is particularly notable, accounting for almost 47.6 percent of the subregion’s total export potential. This prominence reflects the composition of intra-African trade within the region, which is largely characterized by the exchange of manufactured goods. South Africa’s industrial prowess and diversified manufacturing sector position it as a key player in driving intra-regional trade and economic integration efforts within Southern Africa and across the continent. Efforts to leverage this export potential can further strengthen regional economic cooperation and promote sustainable development initiatives.
