Over the coming months, we will receive various data releases to help guide our thinking about South Africa’s agricultural growth prospects in 2023. The available soft insights suggest that near-term growth prospects of South Africa’s agricultural economy look weak after subdued growth of 0,3% y/y in 2022.
Since the deal started, Ukraine has exported about 25-million tonnes of grains and vegetable oils. Global food prices have also moderated considerably over that period, partly for this reason. In February the Food and Agriculture Organisation (FAO) global food price index was at 130 points, down 8% from July, when the initial deal was reached.
Some African countries arguably closely followed the EU’s approach to GMO crop regulations by prohibiting their imports and cultivation. With this new development in the EU and China, it is plausible that some African countries might consider evaluating their current restrictions.
Various government programmes could if implemented effectively boost growth, sustain employment and attract new investment.
Scientists warn a transition is likely later this year after four seasons of La Niña-induced above-average rains from 2019/2020 to 2022/2023.
As we start the new year, there is probably no issue more urgent than the worsening energy crisis for South Africa’s agriculture and agribusinesses. Farmers that rely on irrigation have all expressed concerns that persistent loadshedding is negatively affecting production.
South Africa’s agriculture remains an important sector of the economy and holds great potential to reduce poverty. It’s also central to the political economy of the country, as evident in the governing African National Congress’s (ANC) recent policy documents.
The interlinked problems of poverty, unemployment, and weak economic activity continue to plague rural towns and communities in South Africa. However, the two industries that could help ease some of these challenges — agriculture and tourism — face various constraints that limit their growth potential.
Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) and the author of “Finding Common Ground: Land, Equity and Agriculture“.
He is a Senior Lecturer Extraordinary at the Department of Agricultural Economics at Stellenbosch University and a Visiting Research Fellow at the Wits School of Governance, University of the Witwatersrand.
Sihlobo was appointed as a member of President Cyril Ramaphosa’s Presidential Economic Advisory Council in 2019 (and re-appointed in 2022), having served on the Presidential Expert Advisory Panel on Land Reform and Agriculture from 2018.
He is also a member of the Council of Statistics of South Africa (Stats SA) and a Commissioner at the International Trade Administration Commission of South Africa (ITAC).
Sihlobo is a columnist for Business Day, The Herald and Farmers Weekly magazine.
His weekly podcast, “Agricultural Market Viewpoint with Wandile Sihlobo“, is available on all podcast platforms.
He holds a Bachelor of Science degree in Agricultural Economics from the University of Fort Hare and a Master of Science degree in Agricultural Economics from Stellenbosch University.