Drought puts strain on SA’s neighbours
Poor rainfall to hit agriculture
COUNTRIES in the southern African region, like Zimbabwe and Zambia, have to prepare for further strains to their fiscal positions, as dry weather conditions have worsened into a drought.
The conditions will present a double blow to the regional economies, which are already set for marked economic decline, because of continuously softer commodity prices. Zimbabwe and Zambia are heavily reliant on mining for economic growth amid warnings that they diversify their economies.
Like South Africa, economies in the region are dependent on agriculture, which is now poised for a slowdown because of the dry weather conditions that experts say are being occasioned by the El Niño weather phenomenon associated with extreme temperatures and floods.
“We are faced with little rain,” Joseph Made, Zimbabwe’s Agriculture Minister, said. “We want to assist those who are vulnerable. We are also propping up irrigation to counter the effects of less rainfall.”
Poor rainfall will further worsen Zimbabwe’s economic performance and productivity, with the growth outlook for 2015 already cut back to 1.5 percent with agro-processing companies such as Delta Corporation, a unit of SABMiller, and Hippo Valley, the Zimbabwe listed subsidiary of Tongaat Hulett, expected to be the hardest hit.
Christie Viljoen, a senior economist at NKC African Economics, told Business Report that Zimbabwe’s “import bill is projected to be only 2.5 percent smaller this year as a jump in demand for cereals (due to drought conditions) translate into a smaller decline than the generally weak economic environment would suggest”.
The overall cost and impact on the economy will likely be significant, according to other experts. Regional economies are major exporters of beef to the EU, a lucrative market that is key for much needed revenues, but the drought will affect beef production in countries such as Zimbabwe, Namibia and others.
Caradee Yael Wright of the Applied Centre for Climate and Earth Systems Science and coauthor for a report on the impact of the southern African drought conditions released this week, said the region had suffered “from dramatic yearon-year changes in climate”.
Severe droughts
“This has led to severe droughts and disturbance in the marine or terrestrial ecosystems. Such variability of climate affects the agricultural industry, water reserves, fisheries and, as a result, the broader economy. There is a 50 percent chance of a drought occurring this summer that could have an impact on the whole region,” the report said.
Zimbabwe’s most important cash crop is tobacco, with this year’s tobacco auction season expected to start a few weeks later than usual due to adverse weather conditions, which delayed maturity and drying processes for the tobacco crop.
The value of sales for the 2015 Zimbabwe tobacco crop declined by almost 17 percent to $586 million and Viljoen said weather induced decline in tobacco would scrap by some AS MANY as 29 million people in southern African countries are food insecure, a new report – the Food and Nutrition Security Update – showed on Friday, warning that lower rainfall in the region will lead to reduced cereal yields and lower prices.
Compiled by the World Food Programme (WFP) and Food and Agriculture Organisation (FAO), the report says the food insecurity in the region is being occasioned by the effects of the El Niño weather pattern that is hitting the region.
El Niño is associated with dry weather conditions, flooding and high temperatures. Such conditions have already seen water levels in the key Kariba Dam – which services Zambia and Zimbabwe with electricity – decline. Experts say the dam could be shut down for electricity generation if rains fall late.
“The El Niño is commonly associated with delayed and decreased rainfall in the region, which will reduce yields and push households to adopt negative coping strategies reinforcing chronic malnutrition that is already widespread in the region,” the report said.
It cautions that “unless a twotrack approach is quickly taken to address the current food insecurity and to establish measures to mitigate against the El Niño effects, the existing food margin the agriculture sector’s contribution to gross domestic product (GDP).
Tongaat Hulett has already experienced production and profitability setbacks as a result of the dry weather conditions insecurity will deepen” and increase in scope with its effects.
The effects will last until 2017, pausing risks for countries such as Zimbabwe, South Africa, Malawi, Zambia and others in the region.
Although the entire region is entirely at risk of food insecurity, with economies likely to further be strained, “specific attention is needed for Madagascar, which also has high risk of cyclones; Malawi; Mozambique; Lesotho and Zimbabwe”.
The dry conditions will also affect livestock in countries such as Zimbabwe, Namibia and Botswana. “Maize prices are increasing unusually, by about 15 to 40 percent, in response to the increasing scarcity in the region. A further decline in regional cereal supplies will in the region. Agriculture accounts for about 11.2 percent of Angola’s GDP, while it accounts for 11 percent and 13 percent of GDP in Zambia and Zimbabwe, respectively.
Economists said Zambia increase instability in markets and continue weakening food access unless measures are taken to augment regional cereal supply through imports from outside the region,” the report says.
Cholera outbreaks are likely to escalate in Mozambique, Tanzania, Madagascar and Democratic Republic of Congo, which could also suffer cyclones and flooding. This would aggravate the food and nutrition security situation in the nations.
A Crop and Food Security Assessment Mission jointly undertaken by FAO and WFP shows that 1.89 million people in Madagascar are food insecure. About 400 000 of these are “severely food insecure” and in “need (of) immediate assistance”, with the country was highly exposed to weather conditions due to the linkages of the agricultural sector to the country’s real economy.
Agriculture “is the lifeblood for the majority of the workforce and dominated by smallscale ”already extremely susceptible to climatic shocks” averaging 1.5 cyclones each year.
The drought conditions in southern Africa will strengthen steep rises in cereal prices, which have already been “increasing in a number of southern African countries”, mainly triggered by an increased number of households relying entirely on market purchases against limited supplies.
“This is caused by earlierthan-normal depletion of household’s production stocks as a result of a below average harvest during the 2014/15 season. The region as a whole is well above the five-year price average,” the report says.
It adds that maize prices are likely to increase by as much as 75 percent in highly vulnerable farming with weak irrigation systems, thereby rendering the sector vulnerable to weather conditions,” Irmgard Erasmus at NKC African Economics said.
“In addition, power generation in Zambia is primarily countries such as Zimbabwe, Malawi and Lesotho. This would also “further exert pressure on poor households whose purchasing power is weakened by limited income sources” and declining local currencies.
The report cautions that countries in the region and development partners enhance resilience building programmes and actions geared towards increasing preparedness and early response.
It also calls for urgent “disbursement of funds by member states and the international donor community to activate member states’ emergency preparedness and response plans”, as well as switching to irrigation to counter late or little rainfall. – Tawanda Karombo hydro-based, which means that low (and falling) dam levels increases the daily power deficit. The power deficit is estimated at 1 000 megawatts, necessitating the importation of power… at high cost to the fiscus.”