Agriculture offers best hopes for economic growth in South Africa


The Southern Africa Agri Initiative (Saai) welcomes the national treasury’s discussion document on economic policy that was released on 27 August 2019.

This 62-page document focuses on five themes that will put a stop to weak economic growth and rising unemployment in the long run. A large part of the document focuses on the agricultural and services industries because these sectors are in the best position to bring about labour-intensive growth. Improved access to financing, affordable agricultural insurance, agricultural technical advisory services for developing farmers and access to markets are some of the priorities cited to create a more friendly environment where agriculture can thrive.

Theo de Jager, Saai’s Chairperson of the Board of Directors, says the direction and content of the discussion document represent a fresh breeze from government circles, and he hopes it will meet with approval in wider circles than treasury only. The elephant in the room, that is not taken into account by the document, is the damper on investment appetite caused by BEE requirements and large-scale fraud. In this regard, the discussion document is in sharp contrast to the threats expressed by Thulas Nxesi, minister of labour, to force more draconic race quotas on companies.

Saai is especially excited about the proposals made by Tito Mboweni, minister of finance, on a possible subsidised insurance scheme for agriculture, because it will promote access to financing, broaden risk management and create a unique opportunity to collect production data.

“It also is striking that the report underlines the important role of right of ownership and the possession of assets. Following the recent Graham judgment on the extension of the Upgrading of Land Tenure Rights Act, we would like to see that beneficiaries of land reform and the LRAD programme receive title deeds for their land,” says Francois Rossouw, CEO of Saai.

Saai believes if the proposals put forward in the discussion document are implemented, competitiveness of South African agriculture will increase rapidly.

At the invitation of Mboweni, Saai has undertaken to comment on the agricultural strategy proposed in the document not later than 15 September 2019.