South Africa is home to some of the world’s leading agribusinesses that can compete with the best in the world. But it would be a grave mistake to take their resilience for granted, believes the chairman of the Agricultural Business Chamber (Agbiz), Francois Strydom.
According to Strydom, agribusinesses keep the rural economy running and create employment and livelihood. However, they require credible partners to sustain the growth and vibrancy of the rural economy.
“Operating conditions are becoming more difficult by the day. Rural municipalities are simply not performing optimal and businesses are having to spend millions each year to make up for it,” Strydom pointed out.
As far as he is concerned, this is not a sustainable situation. Leaders must step up and take accountability for the state of business conditions in the country, Strydom said.
Initiatives will yield results but not yet
South Africa has some of the best and most resilient agribusiness in the world, Strydom said. These companies and business people are mobile. He added that they have the skills, knowledge and capital to operate anywhere in the world.
“The mere fact that they are still here shows a deep sense of patriotism and commitment to this country.
“This is not something we should take for granted and it is especially relevant for our political leaders to take note of when positioning South Africa in a volatile geo-political situation,” Strydom noted.
Agbiz CEO Theo Boshoff said agribusinesses are operating under increasingly difficult circumstances, declining service delivery and infrastructure, unreliable energy supply, and increased crime and instability, which do not bode well for investment.
“The private sector has contacted the government and offered to assist where it can. Agribusinesses are willing and able to invest in energy generation and rail and port operations but we need willing partners.
“These sectors are highly regulated so it is not something which the private sector can do on its own. Public-private partnerships are needed,” Boshoff said.
Government reluctant to act
Agbiz said they are engaging at the highest possible level to drive these initiatives and whilst the sentiment is positive, there seems to be little urgency from the government‘s side.
The entire economy is under severe pressure so we need these initiatives to take off within the next year, Boshoff remarked.
“At the current rate, some of these initiatives will only yield fruit several years from now and we fear that businesses may not be in a position to assist the government by the time the red tape is cleared or the partnerships are established.”
‘SA’s Russia affiliation spells trouble’
With the changing geopolitics and South Africa’s ambiguous foreign policy, which Strydom said seems to support Russia, the country risks jeopardising strong commercial relationships with key regions that stood up against Russia’s invasion of Ukraine.
South Africa, Strydom said, should be careful not to risk trade and investment relations with Western countries that have taken many years to cultivate, and that have served the South African economy well.
“We are concerned that South Africa’s foreign policy stance on Russia is at odds, if not hostile, to those countries with which it has long-standing commercial partnerships, especially in the Euro Area, United Kingdom and the US. It is also out of sync with other major economies such as Japan and South Korea,” added Strydom.
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