The agriculture sector has, once again, proven to be a force to be reckoned with in the Mzansi economy after Stats SA’s latest update on the GDP results for the fourth quarter of 2021.
It shows an “impressive rebound” of 12.2% when compared to the fourth quarter of 2020, says Paul Makube, a senior agricultural economist at FNB.
South Africa’s overall real GDP grew by 1.2% in the fourth quarter of 2021, underpinned by gains in trade, manufacturing, personal services and agriculture.
“The upbeat outcomes for agriculture were not surprising given the already positive indications of good seasonal rains that boosted activity with heavy lifting in the wheat harvest which rose… to a record high of 2.26 million tonnes,” says Makube.
“The animal product category also came to the party, making an immense contribution to the agriculture GDP outcomes on the back of higher livestock slaughtering, robust domestic demand, and strong meat prices. Livestock slaughtering increased sharply by 17%, which increased the availability of animal products for local markets and exports.”
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Infrastructure challenges
Agri SA says it is proud of the farmers’ contribution to the national economy, and to the livelihoods of South Africans across the country. It, however, pleads with government to address infrastructure challenges urgently.
“The sector’s performance belies the challenges that threaten to derail its continued success,” believes Kulani Siweya, an agricultural economist with Agri SA.
“The most important of these challenges is the state of… critical infrastructure, especially roads, freight and our failing ports. This is a critical challenge South Africa must address in order to consolidate the gains of the past quarter and accelerate economic recovery.”
Now more than ever, government must play its part in aiding the economy’s recovery by prioritising investment in the repair and maintenance of the country’s critical infrastructure, urges Siweya.
“As it stands, the sector’s performance in the current quarter is already under threat. In addition to the sector’s vulnerability to variables including weather and global market trends, the current crisis in Ukraine will undoubtedly have negative consequences. Input costs like petrol have risen significantly, and other input costs like fertiliser, of which Ukraine is an important exporter, are also expected to rise.”
Agri SA’s warning is echoed by Abigail Moyo, spokesperson of the trade union Uasa. She predicts that the Russia-Ukraine war will negatively impact economic growth in 2022 while power cuts and the slow pace of economic reforms are also worrying.
“Uasa again calls on government to collaborate with the private sector towards job creation and economic recovery, especially now that decelerated growth and increasing fuel and food prices are a reality against the background of the Ukraine war.”
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