State of the Nation 2020
Protecting the agricultural sector must be one of Ramaphosa’s key priorities
PRESIDENT Ramaphosa delivered his State of the Nation Address yesterday. Many South Africans watched, some hoping against hope and maybe some with enthusiasm and renewed hope.
The reality is that the South African economic outlook is not looking good and ordinary South Africans are feeling the pinch of the high unemployment rate, which remained unchanged at 29.1% in the fourth quarter of last year.
The 2020 economic climate is subdued and does not give much hope to the new job seekers who have just entered the labour market.
As a nation, we must at least derive comfort from the fact that South Africa is now poised to reclaim its historical role as the strategic gateway to Africa now that Ramaphosa has just been elected as the chairperson of the AU.
It remains to be seen how we will manage to reposition the African continent in the global arena and multilateral institutions that remain fundamentally less transformed.
The African people should also derive comfort from the fact that the 2003 AU Summit held in Maputo, Mozambique, resolved that African states should allocate at least 10% of their national budgets to agriculture.
Ramaphosa is now given an opportunity to dust off the 2003 Maputo Declaration and accelerate its implementation. Sadly, only six African states – Burkina Faso, Niger, Guinea, Senegal, Mali and Ghana – implemented it.
The domestic front has its own challenges that Ramaphosa must confront. The crisis facing state-owned entities (SOES) has the potential to cripple the economy. Some SOES are failing to deliver on their respective mandates.
The failure of Eskom to guarantee energy security for the country is just one example. The downside of this is that the country is gravitating slowly towards regression, and fundamental economic transformation across the various sectors of the economy will be a far-fetched dream.
A clear example of this is the recent downgrade of the Land Bank from Baa3 to Ba1 (junk status) by the rating agency Moody’s. Adversely, agricultural transformation will suffer in the long term because of this downgrade.
In light of these developments, Ramaphosa must revisit the reconfiguration of the agricultural development finance landscape.
The Presidential Advisory Panel on Agriculture and Land Reform was not completely off the mark when it proposed that a Land Reform Fund be established, given the mounting financial challenges that the agricultural sector continues to face.
It is about time that Ramaphosa marshals the agriculture sector towards precision farming and agricultural innovation as practised in countries such as Germany, especially after German Chancellor Angela Merkel’s visit to the country last week.
There is a lot that the two countries can learn from each other. The post Berlin Wall German land reform programme provides some good lessons for South Africa.
Land administration, management and distribution in Germany was carried out with precision, and appropriate institutions were set up and later dissolved after they successfully fulfilled their respective mandates.
The reorganisation of land reform institutions in Germany began in earnest in 1991 and registered concrete results by 1994.
It is therefore important for the two countries to continue sharing land reform policy experiences on an ongoing basis. It is through such bilateral engagements that South African agriculture will again become the sunrise sector that it once was.
Primary agricultural employment has seen a slight increase in the fourth quarter of 2019, according to the latest Quarterly Labour Surveys. These jobs were created mainly in the horticulture, field crops and livestock subsectors.
Once again agriculture is showing some resilience and great potential despite the gloomy national economic outlook. This is despite the fact that the Eastern Cape and Northern Cape provinces experienced devastating drought in the second and third quarter of 2019.
It is because of this resilience and ability to withstand tough economic conditions that everything possible must be done by the president to promote and protect the agricultural sector.
For the sector to thrive, the government must demonstrate the wherewithal to support agricultural institutions and transformative initiatives.
“The German land reform programme provides good lessons for SA
Maseti is a public and private sector policy specialist at the Land Bank. He writes in his personal capacity and the views expressed in this article are his own and do not necessarily represent the policy positions of the Land Bank