LETTER: Work being done at Magwa brings real economic viability

Wandile Sihlobo relies on old, inaccurate information in his critique of Magwa Tea, ignoring financial investments made by the government over the years. It is now a going concern (“Magwa Tea’s decline the mark of a callous government,” November 2). 

The Eastern Cape department of rural development and agrarian reform, which is responsible for Magwa, is not averse to criticism, but we are sensitive to the use of misinformation and inaccuracies in attacks on our work. 

We are currently presenting a Magwa investment portfolio to potential investors, showcasing an investment opportunity in the Magwa and Majola Agri-Corridor and Eco-Tourism Valley. The inaccuracies in Sihlobo’s article are damaging to the commercial interests of Magwa, the people of Lusikisiki and the investment promotion we are driving. 

It is true that Magwa has been through episodes of looting caused by protesting workers who vandalised offices, machinery, the tea factory and residential properties. In the past there were liquidity challenges, including delays in paying workers, but all of these were overcome when the provincial government took the business through a business rescue process. 

The investors we are pursuing will inject money into Magwa to recapitalise the business, construct a hotel, theme park and residential properties, and produce other high-value crops such as cannabis.

This investment portfolio will be a socially conscious business whose operations will be run by qualified professionals incentivised through a share scheme. The investor will have 51% shareholding in the business, with the local community, workers and government each holding minority shares amounting to 49%. 

Sihlobo decries the lack of commercial farming in the Eastern Cape, which he compares with KwaZulu-Natal’s sugar cane farms. It is true that compared to the Western Cape, Free State,  and North West, the Eastern Cape has relatively few commercial farms.

Stats SA’s agriculture census revealed that there were 4,214 farms involved in the commercial agriculture industry in the Eastern Cape in 2017, among them 2,291 farming with animals, 752 farming cereals, and 713 involved in mixed farming. 

The part of the province Sihlobo was talking about does have a few commercial farms in addition to Magwa, including a number of game farms, Lambasi and smallholdings. 

This data is important in understanding the current agriculture situation in the province, especially our reasons for partnering with commercial agriculture commodity groups to grow the province’s agriculture. 

We are implementing an agriculture for growth and employment programme focused on taking forward the province’s agriculture economic transformation strategy. One of our investments is a R900m blended finance partnership with Land Bank over the medium term expenditure framework.

The department is investing in pineapple production by Bingqala, Pineapple Co-op, Cornfields, Tarfield, Benton, Bathurst, Pineco (Tainton farm) and pineapple farms in Ngqushwa that sell their harvest to Summerpride foods. From the 2014/2015 financial year to date we have invested R19.3m in reviving pineapple production in the area. 

In 2021 we invested R79.3m in maize production, covering 26,198 hectares of land in the OR Tambo, Alfred Nzo, Amathole, Joe Gqabi and Chris Hani districts. About R37.6m of this money was invested in partnerships with commercial grain producers such as AfroSaint Business Consultants, Dalasile AgriPark, Nodayimani Investments and Luleka Mbete Investments, Sagra, Ukhanyo Farmer Development and Wiphold, to work with farmers to produce maize that is sold through offtake agreements. 

About R42.3m has been invested in procuring production inputs for farmers for maize production on 13,633ha, and R36.8m invested in procuring mechanisation services to supply farmers with mechanisation for production on 10,021ha.

By commercialising the province’s agriculture we want to increase the income of the sector from 2017's R27bn, as reported by Stats SA. Some of the farmers we are investing in are producing citrus and apples, farming land acquired through the reform process. 

The work we are doing at Magwa is bringing real economic viability to grow Magwa not just as a tea farm but as a lucrative Magwa and Majola Agri-Corridor and Eco-Tourism Valley, yielding good returns to investors and the people of Lusikisiki. 

Magwa tea is sold in a number of retail stores in the province and we are talking to the CEOs of retail companies and hotels to open up space for the diverse blends of Magwa tea. 

Mvusiwekhaya Sicwetsha
Chief director for communications and customer care at the Eastern Cape department of rural development and agrarian reform.