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Agriculture boosts South Africa’s GDP for 2017 fourth quarter

Agriculture and the trade sector were the main drivers of GDP growth

South Africa’s economy grew by an estimated 3,3% for last year’s fourth quarter. Mike Manamela, Statistic South Africa’s chief director for national accounts said the main driver for growth was agriculture.

“This is largely driven by activities in the agricultural sector which was up by 37,5% mainly due to increased activities or production of animal products. We also saw an increase in the trade sector which was up 4,8%,” Manamela said.

The South African agricultural sector had a record harvest in 2017 despite continuing drought conditions across the Southern Africa region.

Agri-SA’s, an agricultural association, says there are still worrying factors affecting the sector in South Africa.

“The global economy is showing signs of an upswing, however, the recovery is not complete with growth remaining weak in many countries. Weak global growth could have an impact on South Africa, along with the weak domestic growth outlook and policy uncertainty,” the report says.

Hamlet Hlomendlini, Agri-SA's chief economist, said the sector has a vital role to play in the South African economy.

"The sector is very vital to the South African economy, not just for its contribution to the country’s national food security but also because of its forward and backward linkages to other sectors. It is the buyer of machinery and farming inputs form the manufacturing sector, and the manufacturing sector buys some its raw materials from the agricultural sector," Hlomendlini said.

Resilience in drought stricken provinces

Interestingly the Western Cape (WC), Northern Cape(NC) and Eastern Cape(EC), three drought-stricken provinces, all experienced economic growth. Western Cape grew by 1,1% with EC and NC growing by 0.8% and 0,1 % respectively.

Compared to 2016 fourth quarter figures the three provinces have shown resilience and managed to to post a combined average of 2,2% growth.

In February the country’s National Disaster Management Centre declared the three provinces as disaster areas. Mmaphaka Tau, who heads the centre, said South Africa is particularly vulnerable to climate change and its effects.

At a symposium on climate change and water resilience at Free State University he said:

“The country is still battling a number of hazard incidents and disasters such as the worst drought since 1904.”

The trade sector was boosted by increased economic activity in retail, wholesale and positive figures from the trade of motor vehicles.

Weak results from mining and quarrying were strained towards the end of 2017 and posted a 4,8% decline.

Falling demand for new houses and non-residential building activities led to a 1,4% decline in the sector.

An additional R29 billion was added to the South African economy by economic activity from all sectors between September and December last year.

Mike Manamela said the results for the first three months of 2018 will be published in June.

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