An Analysis and Review of Subsidies in Southern Africa

The report examines subsidies within the Southern African Customs Union (SACU), focusing on South Africa's manufacturing, agriculture, and energy sectors. It finds that most domestic incentives are WTO-compliant, though the Duty Credit Certification Scheme for textiles is an exception. The agricultural sector has seen significant deregulation since the 1980s, resulting in low Producer Support Estimates (PSE) for most commodities. However, the region remains vulnerable to foreign subsidies, particularly the EU's Common Agricultural Policy (CAP) and the U.S. Farm Bill, which distort markets for sugar and beef. In the energy sector, South Africa's heavy reliance on coal creates high carbon intensity and a lack of incentives for renewable energy due to low coal prices.

• Most domestic incentives and subsidies for the manufacturing sector in SACU comply with WTO rules, with the specific exception of the Duty Credit Certification Scheme (DCCS) for clothing and textiles, which was scheduled for phase-out by January 2005.
• South Africa's agricultural sector underwent radical reform since the late 1980s, including the abolition of all marketing boards and the tariffication of Quantitative Restrictions (QRs).
• By 1998, most South African agricultural commodities had virtually no domestic support, except for sugar (40%), mutton (50%), dairy (20%), beef and veal (20%), and wheat (20%).
• South Africa is highly energy- and carbon-intensive, with over 85% of its coal production used for electricity generation and other mineral beneficiation or domestic energy.
• There are few subsidies or incentives in South Africa to encourage a transition to renewable energy or cleaner technology because coal prices remain low.
• The EU's Common Agricultural Policy (CAP) negatively impacts the sugar industries of South Africa and Swaziland through the dumping of heavily subsidized sugar products into SACU.
• EU beef export refunds have historically flooded the Southern African market with low-quality beef, directly competing with small-scale and emergent commercial farmers, particularly in Namibia.
• The 2002 U.S. Farm Bill is expected to increase U.S. agricultural spending by nearly 80% to approximately $190 billion over ten years, potentially shutting out developing countries from international markets.
• Government intervention in the steel sectors of OECD countries has led to massive surpluses, resulting in anti-competitive practices such as export subsidization and dumping in open markets.
• While South Africa has no pending WTO dispute cases, it has frequently used anti-dumping and countervailing measures; by June 2002, there were 98 definitive anti-dumping duties in force.

APA

Cassim, R., & Onyango, D. (2003). An Analysis and Review of Subsidies in Southern Africa. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/trade_subsidies_sa.pdf

Chicago

Cassim, Rashad, and Donald Onyango. An Analysis and Review of Subsidies in Southern Africa. International Institute for Sustainable Development, 2003. https://www.iisd.org/system/files/publications/trade_subsidies_sa.pdf.

Wikipedia

{{cite report |last1=Cassim |first1=Rashad |last2=Onyango |first2=Donald |title=An Analysis and Review of Subsidies in Southern Africa |publisher=International Institute for Sustainable Development |date=July 2003 |url=https://www.iisd.org/system/files/publications/trade_subsidies_sa.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cassim2003analysis, author = {Cassim, Rashad and Onyango, Donald}, title = {{An Analysis and Review of Subsidies in Southern Africa}}, institution = {International Institute for Sustainable Development}, year = {2003}, month = jul, url = {https://www.iisd.org/system/files/publications/trade_subsidies_sa.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }