BioPANZA

The National Environmental Management: Biodiversity Act (10/2004) prescribes the National Biodiversity Framework (NBF) to coordinate and align the efforts of the many organisations and individuals involved in the complex landscape of biodiversity strategies and initiatives. One of the NBF’s objectives is to recommend key interventions or accelerators to expand and strengthen the National Biodiversity Economy Strategy (NBES) and to facilitate its implementation.

A key mechanism in the NBES is the establishment of the Bio Products Advancement Network South Africa (BioPANZA). BioPANZA was conceptualised during the Operation Phakisa-Biodiversity Economy Delivery Lab between April and May 2016. Today it is a collaborative initiative between the Department of Forestry, Fisheries and the Environment (DFFE), the Department of Science and Innovation (DSI) and the Department of Trade, Industry and Competition (the dtic).

BioPANZA is mandated to ensure coordinated and efficient collaborations between sector stakeholders to address gaps and developmental challenges, and to take South African value-added natural ingredients to global markets.  

This will be achieved by: 

  • Promoting local innovation and product development, including through business incubation and the establishment of local production facilities.
  • Promoting access to financial assistance.
  • Facilitating access to information (eg, relevant legislation, funding opportunities, research opportunities and market sector information).
  • Promoting networking and organising events.
  • Providing trade and export information centres or platforms at national and international level.

The BioPANZA aims to achieve this through its five clusters:

  • Policy and legislation  
  • Finance
  • Innovation
  • Sustainable supply
  • Market access 

Coordination and cohesion between these clusters is crucial to ensure sustainable and efficient support to the biotrade and bioprospecting sectors. 

The second African Biotrade Festival (ABF) was a BioPANZA initiative hosted by South Africa’s Department of Forestry, Fisheries and the Environment, with the Department of Trade, Industry and Competition (the dtic) and the Department of Science, Technology and Innovation (DSTI). 

South Africa is recognised as the third most biologically diverse country, based on its high level of endemic species, and its natural ingredient and product economy (biotrade and bioprospecting) has an estimated growth potential of approximately 80% (DEA, 2014).

The country has a long history of its people using indigenous biodiversity for medicinal, cosmetic, food, flavour and nutraceutical purposes. However, unemployment prevails across the country especially amongst youth which comprise just over 50% of the country’s population.

Like the rest of the world, South African MSMEs are also drivers of growth whilst bearing the complexity of business survival. Business survival is further strained for MSMEs in the biotrade and bioprospecting sector due to the complexities of market access. Market access refers to the ability of an enterprise or country to sell goods and services within and across borders (Investopedia, 2020).

Potential markets 

The indigenous natural products make it into markets like: 

  • Complementary and Alternative Medicines (CAMs)  
  • Traditional Herbal Remedies
  • Food and dietary supplements
  • Functional foods and beverages (health claims, pre-market notifications)  
  • Cosmetic products (natural, organic, active ingredients, etc)  
  • Flavours and fragrances  
  • African Traditional Medicines (ATMs) – in the informal domestic market

Market access challenges 

Accessing these markets is a growing challenge for MSMEs in emerging upper middle-income economies such as South Africa. MSMEs interested in exporting face significant barriers to market access, including: 

  • Widespread specific tariffs discriminating against low-cost, low-volume and low-price suppliers.  
  • Falling commodity prices are a double curse: exporters not only earn less foreign exchange, but also face higher effective market access barriers.
  • Non-tariff barriers are multiplying and especially affect exports from emerging countries (examples include plant health standards, food safety standards, environmental certification and other export quality standards).

Destination markets for the South African bioprospecting/biotrade sector include the northern and eastern countries that have high consumer uptake potential provided that the ingredient/product complies with the consumer safety legislations. As a result, it usually takes an enterprise in the bioprospecting/biotrade economy between five to 10 years to break into an offshore market. The South African domestic market for biotrade and bioprospecting products is mostly informal, with significant efforts from various stakeholders in the sector to scale the sector nationally. The innovation potential, coupled with the prospects for the South African biotrade and bioprospecting sector to participate in global value chains, is significant and requires a multi-stakeholder partnership to unlock.