12
e-Newsletter
1/2020
17 January 2020
BUSA hosts Business Economic Indaba 2020 (BEI2020)

This week Business Unity South Africa (BUSA) hosted its 2nd Business Economic Indaba, bringing together its members, business leaders, diplomatic corps and the leaders in government, including President Ramaphosa and various economic sector ministers. The indaba was a useful exercise in refocusing the critical issues that need to be addressed to turn the flagging economy around and put South Africa on a path of sustained and significant inclusive economic growth. Agbiz members are aware that we are engaging government and Eskom on various fronts to address the crippling electricity supply by Eskom, and especially to get government to change the policy and bureaucratic framework around embedded generation and Independent Power Producers (IPPs). To this end both Mr Sipho Pityana, President of BUSA, and President Cyril Ramaphosa had a special focus on this critical issue. Please peruse the opening address of the BUSA President, as well as an article by Daily Maverick in this regard. As a follow up, BUSA, including Agbiz, will meet with Minister Gwede Mantashe next week on the policy and bureaucratic framework, while the comprehensive response and key note address by President Ramaphosa will be circulated once received from the Presidency.
SARB cuts repo rate by 25 points

The South African Reserve Bank's Monteary Policy Committee has elected to cut the prime lending rate for the first time since March 2018, by 25 basis points, to 6.5%. The announcement was made by the central bank's governor Lesetja Kganyago in Pretoria on Thursday afternoon. Kganyago said the decision was unanimous.  A rate drop was widely expected by the market, with economists noting that there was enough room for a cut, adding that the move would help reignite some activity in the market, and starting a series of cuts that economists forecast could total as much as 75 basis points over six months, Bloomberg reported. The linked article on Moneyweb provides more insight on the implications for the economy.
Restoring growth in the South African economy discussed at BER seminar

After nearly a decade of weak economic growth, rising unemployment and a deteriorating fiscal position, South Africa's macroeconomic policy options are constrained. Rising debt and SOE funding requirements have narrowed the scope for fiscal stimulus, while weak investor confidence and
financial vulnerability limit the potential effectiveness of monetary measures. 
The BER, in consultation with National Treasury, Business Unity South Africa (BUSA) and the Association of Savings and Investment of SA (ASISA), hosted a one-day seminar on 4 December 2019 to clarify thinking and explore option for macroeconomic policy and inclusive growth. The small discussion group comprised representatives of National Treasury, the South African Reserve Bank, the Department of Trade and Industry, the financial sector, ASISA, BUSA and academia. Please click on the BER presentation and the overview report for the key messages from the seminar.
AGRIBUSINESS RESEARCH
Should SA boost its agricultural exports to China?
 
If you are an agribusiness or farmer in SA, it is almost impossible not to think about the possibility of expanding the footprint of your product to a big and growing market such as China. After all, the success of SA's agricultural sector is, in part, linked to trade. SA exports nearly half its agricultural products a year in value terms, mainly throughout Africa and the EU. More recently, Asia and the Far East (particularly China) have become a key growth frontier that present SA with new opportunities to expand its agricultural exports. Overall, Asia has accounted for a quarter of SA's agricultural exports, with indications that SA can potentially increase its market presence substantially in the future. Wandile Sihlobo shares his insights in the linked article.
Rural infrastructure investment is part of South Africa's growth strategy
 
As practising economists, we usually spend a substantial amount of time looking at the world through data generated by official government institutions, private-sector businesses and households. While this is the traditional way to look at the economy, at times it doesn't fully capture the nuances of various developments, especially at localised levels.
"It is for this reason that we decided to take a tour from Gauteng to Limpopo to interact with various members of society and observe the landscape of development in the rural economy," Wandile Sihlobo and Isaah Mhlanga, chief economist of Alexander Forbes, wrote in the linked article, written for and first published in Business Day.
Is it too little too late for Zimbabwe's maize imports?
 
In the linked article, Agbiz chief economist Wandile Sihlobo writes: In 2019 I applauded the Zimbabwean government for having grasped the urgency of a potential maize shortage in time and outlining a plan to address it. This after Joseph Gondo, chief director of Zimbabwe's agriculture ministry, told Bloomberg on June 6 that the country's Grain Marketing Board, a state-owned agency, would float an international tender to import 750 000 tonnes of maize.While this was set to be the largest maize import volume since the 2016/2017 season, it was somewhat less than what I thought the country needed to fill the shortage in the 2019/2020 marketing year of 1 million tonnes.
AGBIZ FRUIT
South African agriculture needs to become expert at international relations
 
Now is the time to think strategically and to cast the net wider," says Stephanie van der Walt, manager of Agbiz Fruit.  "For me there are a number of themes this year, notably the Brexit process that is expected to initiate on 31 January, the opportunities that can be leveraged through business' active participation in the BRICS grouping via the BRICS Business Council and the new African Continental Free Trade Area that will launch on the first of July." Please click here for the article, written for and first published on Fresh Plaza.
Brexit update
 
With British Prime Minister, Boris Johnson's Conservative Party taking an overwhelming majority in the December 2019 election, uncertainty about the United Kingdom's exit from the European Union has been laid to rest. It's no longer a question of whether Brexit will happen, but a question of process. Stephanie van der Walt, manager of Agbiz Fruit, discusses the latest developments in the linked article.
OTHER NEWS
General manager vacancy at Agbiz Grain

A sought-after opportunity in a challenging position for the right candidate to apply his/her expertise and full potential. The above-mentioned vacancy currently exists at the Agbiz Grain head office in Pretoria. Agbiz Grain is a fully-fledged and dedicated desk under the Agricultural Business Chamber (Agbiz) and was established in November 2014 by the 12 commercial grain handling or storage companies in South Africa. This is a strategic significant post that reports directly to the chairman and board of directors. The ideal candidate is an energetic leader and motivator with high personal standards. Please click here for more information.
Agriculture Development Agency to be launched in February

The much-anticipated Agriculture Development Agency will be officially launched at the Africa Agri Tech Conference and Expo (AAT) on 18 February 2020, to be held at the Maslow Hotel, Times Square, Menlyn Main in Pretoria. The launch of the Agriculture Development Agency will also serve as the opening event of the AAT conference, which will run from 18 - 20 February and cover topics ranging from the local and international agricultural economy and access to capital, to mitigating drought conditions through sustainable climate sensitive agriculture as well as developing intra African trade in agricultural products. Press release
Water-use efficiency under the spotlight in IFC report

The International Finance Corporation (IFC), in partnership with SECO and Agbiz, conducted a study on the opportunities, challenges and outlook of resource efficiency in South Africa's agri-processing sector. The study identified the potential to save up to 30 million cubic meters of water per year, equivalent to 20% of the sector's total water consumption, which will require an investment of $400 million. The study provides in-depth analysis on nine key subsectors and the policy framework on water use in agri-processing in South Africa. 
Fall armyworm alert

Current weather patterns in southern Africa may be conducive to the outbreak of certain insect pests. Moist air from the tropics may bring another infestation of the fall armyworm into the Limpopo, North West, Free State and Northern Cape while the current conditions in these provinces and KwaZulu-Natal are conducive to the outbreak of African armyworm in veld and grazing paddocks. CropLife SA has been notified of massive clouds of small moths visible early evening in the northern parts of Namibia around Otjiwarongo, while a large-scale caterpillar infestation has also been reported by sunflower growers North West. Although the Karoo remains extremely dry in most parts, it is possible for the migratory locust to appear, although it is unlikely at this stage. Please click here for the full Croplife statement.
The Export Barriers Monitoring Mechanism is now active

The Export Barriers Monitoring Mechanism (EBMM) pilot project is now open to receive reports. Should you encounter any challenges while exporting, please complete the reporting template and submit it to ExportBarriers@thedti.gov.za. Companies or industry associations looking to report multiple past or current export barriers can either complete a bulk submission of reports, or can request a half-day workshop with a dti official, who will register the barriers on your behalf.  For further information or to request assistance, please click on the user guide or contact the EBMM at ExportBarriers@thedti.gov.za or by calling 012 394 1573.
US-China deal creates much uncertainty over Brazil's soybean business

China finally placed a dollar value on its planned boost of US agricultural purchases during Wednesday's trade deal signing ceremony, something it was previously unwilling to do, validating some of the earlier unconfirmed figures cited by the US side. There are still many important details that are unclear to market-watchers, such as the specific breakdowns by commodity, but another large unknown lurking in the background is how the newly inked agreement will impact trade between China and its number one soybean supplier, Brazil. Please click on the Reuters article to peruse.
Exploring new sources of large-scale job creation

Structural change is taking place in Africa, but with a pattern that is distinct from the historical experience of industrialized countries and contemporary East Asia. Export-led manufacturing is playing a much smaller role in the structural transformation of Africa's economies. In fact, on average, the share of manufacturing in Africa's GDP has fallen since 1980. Instead, services-some with quite low productivity-absorb the bulk of African workers leaving agriculture and moving to cities. These changes reflect the impact of technological progress, a changing global marketplace, and natural resource endowments on Africa's industrialisation prospects. Chapter 3 of the Foresight Africa 2020 report , explores six overarching themes that provide opportunities for Africa to overcome its obstacles and spur inclusive growth.
MEMBERS' NEWS
Advice on container management 

CropLife SA has a well-structured empty container management system with collectors and recyclers that have been vetted and approved as reliable and ethical operators. They assist farmers by redeeming triple-rinsed empty plastic pesticide containers and recycling the containers into other valuable plastic commodities.  All CropLife SA approved service providers issue farmers with a Certificate of Adequate Disposal that export producers require for their GlobalGAP certification. More than 62% of empty containers are collected and recycled through the effective services of the 45+ CropLife SA approved collectors and recyclers. Please click on this link for a  list of resources to assist anyone who wants to get involved.
UPCOMING EVENTS
L ast chance! Discounted early bird registration ends 31 January 2020



REGISTER TODAY and don't miss your chance to save up to R500 on your registration fee.

Accommodation reservations are processed on a first-come, first-served basis, so don't be disappointed - BOOK TODAY to secure a room and qualify for the discounted accommodation rates.

Please click here for more information and to register.
Nedbank Vinpro Information Day
Theme: "Touch and change"
23 January 2020 | CICS | Cape Town

Africa Agri Tech South Africa
18-20 February 2020  | Time Square | Menlyn Maine | Pretoria
More information

AFMA Forum 2020
Theme: "Explore today for a better tomorrow"
3-5 March 2020 | Sun City | South Africa

Skills Development Summit & Achiever Awards 
4-5 March 2020 | CSIR Convention Centre | Pretoria
Contact  Gordon Campbell: gordon.campbell@skillssummit.co.za

Agritech Africa
17-19  June 2020 | Cape Town International Convention Centre  | Cape Town

Agbiz Congress 2020
Theme: "Building resilient and sustainable agri-food ecosystems".
15 - 17 July 2020 | Sun City Convention Centre | South Africa

Soya Bean for Human Consumption Symposium
17 September 2020  | Pretoria
AGBIZ MEMBERSHIP
Why join Agbiz?
  • Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
  • Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.

                                      Like us on Facebook            Follow us on Twitter            View our profile on LinkedIn                                    
THIRD-PARTY WEBSITE LINKS TO THIS NEWSLETTER
The Agbiz Newsletter may contain a few links to websites that belong to third parties unrelated to us.  By making these links available, we are not endorsing third-party websites, their content, products, services or their events.  Agbiz seeks to protect the integrity of its newsletter and links used in it, and therefore welcomes any feedback.
In this newsletter