Medium-Term Budget: Agri SA concerned about regulation of agricultural land holdings bill
Finance Minister Malusi Gigaba’s Medium-Term Budget Policy Statement (MTBPS) used several agricultural related metaphors, such as sowing and reaping. This highlights an emphasis on encouraging economic inclusiveness where citizens actively work together to build a better future for South Africa.
Unfortunately, in the rest of his speech, agriculture received relatively little attention, besides mention of the potential economic link to the manufacturing sector. There was no mention of agriculture’s contribution to economic growth nor the plight of farmers affected by ongoing droughts. Worryingly, the contingency reserve has been pared down to a meagre R16 billion over the next three years. It is unclear how this will impact on emergency assistance for crises such as the drought and the recent outbreak of avian flu.
Economic growth projections were revised downwards to 0,7% from the 1,3% tabled in February. Lower growth places further pressure on revenue collection and the government budget. For this reason, improving economic growth is a key theme throughout the MTBS. Unfortunately, South Africa’s current growth outlook compares poorly to that of the rest of Sub-Saharan Africa and our other key trading partners. While improving global growth presents an opportunity for increasing exports, domestic factors that dampen growth need to be addressed.
Agri SA welcomes the Minister’s call for decisive leadership and the need for government to improve its productivity and decisiveness. We also welcome the focus on actions to combat constraints to economic growth. These constraints include policy uncertainty, governance challenges, a constrained fiscal framework and rising government debt, as well as political uncertainty.