Senwes Scenario February / March 2019 | Page 12

NEWS Agbiz Outlook 2019 – Be ready! If there is one thing we’ve learnt from Agbiz Outlook 2019, it is that we need to be ready for anything, according to Agbiz CEO John Purchase, when he spoke about the outlook for 2019 and beyond.  By Aubrey Kruger Senwes Scenario Editor H e mentioned that “things are definitely changing, but how they are going to pan out we do not know.” He especially referred to China and the US and how everything will evolve. What was clear is that China and Russia want to make an impact and countries like England, Japan, etcetera were becoming more forceful in Africa. Religious fundamentalism is still an issue and Africa is prone to it, as it hap- pens even in South Africa and in Northern Mozambique. These issues “disrupt the good order”. Another issue to be resolved is Brexit and the EU with major uncer- tainties: “Britain’s GDP will drop, there is no doubt about that. But it does present certain opportunities for South Africa and the agricultural sector.” On the other side of the Atlantic is “the US President Donald Trump’s dynamics - the way in which he does business and per- forms his functions is very different. He has basically rewritten the rulebook.” Great uncertainty is manifesting itself around the world and South Africa is one of the coun- tries with more certainty. His advice is to create a more predictable environment. THE INTERNET OF THINGS “The internet is still driving globalisation, which is not going to change.” One thing that will change globally is mass migrations and the humanitarian disasters posed by it. It will impact agriculture and the food system. On top of this, environmental sus- tainability statistics don’t make for good reading and we are definitely not turning the environment and global warming around. “We are seeing changing weather patterns in South Africa and it will impact agriculture, that you can be sure of.” GLOBAL POPULATION Did you know? 36% of the world’s popu- lation resides in India and China. Africa will reach the 1 billion population mark in 2050. “Point being, we need to get sys- tems in place to feed people, otherwise we are going to leave a bad legacy in Agbiz CEO, Dr John Purchase, received the Order of Agricultural Merit (Mérite Agricole) from the Ambassador of France, Christophe Farnaud, on 5 December 2018. The Order of Agricultural Merit is bestowed by the French Republic for outstanding contribution towards agriculture. He thanked Purchase and added: “It also resembles recognition of his exceptional career in the agri-industry.” He also emphasised Purchase’s involvement between the two great agricultural powers of France and South Africa. 10 SENWES SCENARIO | MIND-SHIFT 2019 Africa.” This whole dynamic can be either a massive opportunity or a massive risk. POLITICS “You can’t separate politics and the econo­ my.” The ANC is still in turmoil and the DA and EFF are no longer viable ruling coalitions with many problems of their own. Current estimates regarding the 2019 national elections are that the ANC will lose ground to approximately 55%, the DA will stay in the 22-23% region with the EFF being a big gainer (16%), but this could change as we move closer to the elections. Political uncertainty is not good for the economy as it detracts investors. One important fact is that the GDP in rand terms masks the effects whereas in dollar terms during the Zuma administration, the GDP moved from $8 000 to $5 200 per capita. This means that South Africans are more than 25% poorer - “The poor gets affected the worst. It is a real nightmare. But now we have to turn it around.” On top of it all the government fiscus is under pressure, battling to pay bloated public service and funding state owned enterprises. The effect of the fiscal framework expenditure and VAT budget balance amounts to a full percent deficit on budgets for the next four years – “So, South Africa pays more to service its debt, but basically we have no choice but to keep serving the population.” He finished by saying enough is enough. We’ve got to get government to perform regulatory functions and be pro- active to get the economy going and drive things to ensure investment growth.