4 minute read
Driving economic growth through agriculture
Driving economic growth through agriculture
Increasing jobs and promoting resilience
Agriculture remains an essential sector in South Africa, not only for food security but also for driving economic growth. Its potential to increase jobs and the national GDP has been the sector earmarked in the government’s economic recovery plans – a move that is already showing dividends. The agriculture sector continues to prove its resilience with growth in the second quarter of 2022.
Agriculture and agro-processing exports amounted to R51 billion, an increase of 12% from the first quarter of the year. The growth has been welcomed by Minister of Agriculture, Land Reform and Rural Development Thoko Didiza, who has been focused on ensuring the sector’s performance remains a priority.
Championing progress in agriculture
Minister Didiza is currently serving as the Minister of Agriculture, Land Reform, and Rural Development for a second time, having served previously as Minister for Agriculture and Land Affairs between 1999 and 2006, before taking up the role as Minister for Public Works between 2006 and 2008.
She has held a wide range of memberships and civic positions, including as Coordinator of the National Youth Programme, Treasurer of the Natal Women’s Organisation, Women’s Advisory Committee member of the South African Council of Churches (SACC), Associate member of the Women’s Development Bank, and National General Secretary of the Women’s National Coalition, among others.
Minister Didiza has committed to building a strong agricultural sector through tools such as the Agriculture and Agro-processing Masterplan, which is part of the country’s Economic Reconstruction and Recovery Plan. Economic Reconstruction and Recovery Plan is a collaborative initiative between government and social partners aimed at boosting post-pandemic economic recovery. The plan identifies industries that can play a critical role in bolstering economic performance.
Minister Didiza’s master plan for the sector could create around 317 000 new jobs, most of which will be in the private sector among producers of fruits, nuts, wine and vegetables, and agro-processing. Expanding production and promoting export is expected to contribute around R80 billion in gross production value.
Minister Didiza | Minister of Agriculture, Land Reform, and Rural Development
The growth of the agriculture sector has helped to create job opportunities, and the first quarter of the year saw a large increase in the number of people employed in the sector. The number of people employed in the agricultural sector increased by 6.6% in the first quarter of 2022, from 792,000 people in the first quarter of 2021 to 844,000 people in the same quarter of 2022. Of the 52 000 jobs created, 21 000 were created for women.
Expanding markets to promote resilience
Exports remain a key market for South Africa. The agricultural sector accounts for at least 10% of the country’s export earnings. South Africa produces grains, fruits, wine and vegetables, as well as livestock production, and the export of this produce generates an estimated $10 billion in earnings for the country.
Minister Didiza said: “The African continent remained the largest agricultural export market for South Africa in the second quarter of this year, accounting for 35% in value terms. Asia was the second largest region, accounting for 28% of the exports, with the EU holding the third position with a 21% share in the total exports in value terms.”
To ensure continued growth for the agricultural sector, Minister Didiza has vowed to seek further opportunities for export, including increased trade with Japan, China, India, Saudi Arabia, Bangladesh, the Philippines, and South Korea.”
Increasing the number of markets the agriculture sector supplies will go a long way toward increasing its resilience. Currently, South Africa primarily supplies produce to Africa and a selection of Asian and European countries. This makes it vulnerable to import bans or changing regulations. Increased export diversification will build the country’s economic resilience and make it better equipped for disruptions to global supply chains.
International trade has been essential to South Africa’s agricultural sector since the early 2000s, thanks to several key free trade agreements and international markets.
The value of its exports is roughly half of the country’s produce, and the sector is a crucial economic driver and job creator.
In the last ten years, agriculture and agro-processing increased by around 9%. This demonstrates the potential for the next decade – with the right investment, trade partnerships and support, the agricultural sector can continue to grow. This progress will, in turn, unlock jobs and economic growth.