SA must take advantage of Africa’s economic growth

The economic outlook for the EU, one of South Africa’s core markets for agricultural exports, isn’t very good, and SA’s agriculture sector needs to diversify when it comes to export markets.

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This was according to Alan Winde, the Western Cape MEC for economic development, who was the opening speaker at the recent Africa Agribusiness Forum in Somerset West. “At least six of the 10 fastest growing economies in the world are in Africa, and we’re currently trading with one or two of them, but this isn’t enough. South Africa needs to improve its trade links in Africa to take full advantage of economic growth on the continent,” he said.

Winde’s statement was supported by the statistics quoted by some of the other speakers, all of which pointed to the fact that purchasing power and demand in Africa is growing and SA is ideally placed to supply this demand. According to Dirk Troskie, the director of business planning and strategy at the Western Cape Department of Agriculture, the gross domestic product (GDP) in sub-Saharan Africa is expected to grow from R6,7 trillion in 2009 to more than R14,2 trillion in 2016. During this time the per capita GDP in the region is likely to increase from around R17 500 to almost R25 000.

The economies of Eritrea, Ghana, Kenya, Zambia, Angola, Mozambique and Nigeria are expected to increase by between 80% and 140% during the next five years, said Troskie. “Meanwhile South Africa’s economy is expected to increase by only 40% over this period.” Troskie added that agricultural production in Angola, Nigeria, Malawi, Ghana and Mozambique increased by between 100% and 140% from 1990 to 2009, while agricultural production in SA only increased by about 30%.

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The value of agricultural production on the continent increased from about R660 billion in 1990 to just over R1,16 trillion in 2009, but the per capita index declined, which means that the amount of food being produced per person has declined, explained Troskie. “Some economies in Africa will double in size during the next five years and individual purchasing power is also increasing, but production is not keeping up with demand.”