Covid-19 Watch

Agriculture cushions RSA GDP in the 4th quarter of 2020

Statistics SA’s GDP showed a strong growth in agriculture of 5.9% in the fourth quarter which according to senior agricultural economist at FNB, Paul Makube, brought the overall 2020 performance to 13.1%

“The strong fourth quarter agriculture outcome was underpinned by increased production of animal products which account for over 50% of the country’s agriculture gross producer value. The animal products defied the seasonal demand pressures during winter as well as the COVID-19 disruptions and came out stronger as prices were resilient across most categories,” Makube said.

According to the Agricultural Business Chamber February Insights, South Africa’s total agricultural exports amounted to US$10,2 billion in 2020, with citrus, grapes, wines, apples and pears, maize, nuts, sugar, wool and fruit juices cushioning the sector with a 3% increase from the previous year.

Favourable rains and weaker domestic currency further provided room for RSA agricultural products to be more competitive in the global market especially under COVID-19.

Makube agreed with the sentiments expressed by Stats SA.

“For example, export revenues increased 3% (year-on-year) to a three-year record of US$10.2 billion with maize exports for the second half of 2020 increasing by over 200% relative to the 2019 levels. The citrus industry also recorded a fantastic year with better prices and strong volumes as demand spiked in major export destinations $10,7 billion in 2018.”

Prod Raymond Parson from the Business School of the North West University of the GDP figures was nuanced and said the economy needed to move much quicker into more sustainable job-rich growth territories.

“On present evidence this economic ‘rebound’ could amount to about 3% growth in 2021 as a whole, which will permeate most business sectors as the recovery proceeds. However, we need to acknowledge there is still a long way to go to restore national output and employment to their pre-pandemic levels. Several uncertainties still exist,” he said.

These uncertainties included the raging debate on the National Minimum Wage previously announced by Minister of labour and employment Thulas Nxesi which farmers said they could not afford.

According to Makube, for the 2020/2021 South Africa could still expect a good productive season.

“The recent harvest estimates of the country’s biggest staple, maize, point to a potential crop north of 16 million for 2021. Horticulture and livestock conditions are conducive to further stellar growth in agriculture.”

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