The National Treasury now expects the South African economy to grow at 1,9% in 2022 and to remain at sub -2% over the next three years. This means the challenge of joblessness and tough business operating conditions will likely remain for some time. These are issues that Finance Minister, Enoch Godongwana, reflected on in his Medium-Term Budget Policy Statement and outlined the steps the government is taking to move the country out of this low-growth trap.
In response to the MTBPS, Agbiz by means of its Chief Executive Officer, Theo Boshoff, and Chief Economist, Wandile Sihlobo, wish to respond as follow:
Electricity supply
At Agbiz, we welcome the work underway to stabilise the electricity supply and hope there could be a clear path to providing a reliable electricity supply for the country. This remains a major challenge for agribusinesses and the agricultural sector that depend on Eskom for electricity supply for irrigation and to maintain biosecurity and other systems in the poultry and livestock value chains, amongst other aspects.
Water use licenses
Agbiz furthermore welcomes the work done as part of reforms in easing the water use licenses and the organisation will continue to work with the government on existing glitches in this area that continue to challenge the agricultural sector.
Focus on infrastructure
Minister Godongwana’s emphasis on infrastructure needs and the efficiency of the state-owned enterprises and municipalities is positive. But we will need to see the continuous effort of reforms in these areas. The inefficient municipalities have for some time been a major risk to agribusiness and agricultural sector, especially in small rural towns. The National Treasury will have to intensify its revitalisation efforts, which are vital for service delivery and economic development. The government’s support of Transnet, an entity that is instrumental in agricultural exports, is positive. Agbiz has also increased its collaboration with Transnet so that there is good alignment in visions and services for the agricultural sector.
Overall, Agbiz welcomes the 2022 Medium-Term Budget Policy Statement and look forward to collaborating with government and other industry stakeholders to rebuild the South African economy.
