Cape Town – Two successive droughts have hit South Africa’s agriculture sector hard and the country subsequently has to resort to being a net importer of maize, says National Treasury.
In its medium-term budget, Treasury outlined how the drought has hurt South Africa’s economy.
The agriculture, forestry and fishing sector contracted by 8.3% in the first half of 2016 compared with the same period in 2015, said Treasury.
“Two successive seasons of severe drought in the summer rainfall regions resulted in six consecutive quarters of falling output, following robust growth in 2014,” said Treasury.
“As a result, South Africa will be a net importer of maize in 2016/17, with imports expected to exceed 2 million tons."
However, Treasury said exports of certain fruit, nuts and beef products have “remained resilient, supported by the weaker rand, global demand and market diversification”.
“Output is expected to recover as weather conditions improve,” Treasury added.
A struggling agriculture sector is a key reason behind Treasury’s decision to lower its overall growth forecast for South Africa.
As part of its mini budget, Treasury on Wednesday said it has revised South Africa’s growth forecast for 2016 from 0.9% to 0.5%.
Treasury said it further expects a moderate recovery over the next three years, with gross domestic product growth reaching 2.2% in 2019.
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