Another dry spell is headed for SA
Some experts say there’s a 60%-70% chance that an El Niño effect will hit SA by the summer. This would mean dry conditions during the new crop season and would place water resources under renewed strain
Though pressure has since eased, a few months ago the drought in the Western Cape led to stringent water restrictions and fears around "day zero". But as the El Niño climate effect threatens to return, the rest of SA has perhaps been too quick to forget what it was like just two years ago across the entire country.
In 2015, El Niño brought on the worst drought to hit SA since 1982, with the government declaring five of the nine provinces drought disaster areas for agriculture.
The El Niño effect was first recognised by fishermen in South America in the 1600s. The SA Weather Service defines El Niño as "the warming of sea-surface temperatures in the equatorial Pacific Ocean which influences atmospheric circulation, and consequently rainfall and temperature in specific areas around the world".
In large parts of Zimbabwe, Zambia, Malawi, Mozambique, Botswana, SA and Madagascar, the 2015 rainfall season was the driest in 35 years.
Though the phenomenon faded by May 2016, it halted crop production and fuelled inflation across the region, leaving millions in need of food aid.
Cape Town was worst hit and is struggling to recover even today. As the end of the rainy season approaches, dams have only just passed a 60% provincial average.
It’s not unusual for the pattern to recur. El Niños occur every two to seven years. Warm water generally appears off the coast of South America near Christmas time, and reaches its hottest in the eastern Pacific as spring approaches the following year.
But murmurs of the return of the El Niño effect could tip SA’s already fragile economy over the edge.
A possibility exists that we might have dry conditions prevailing during the new crop seasonPaul Makube
In the 1960s, agriculture contributed 10% to the economy — today it’s just 2%. Yet it provided a much-needed boost in 2017, lifting the growth rate more than expected, to 1.3%.
Then it changed. Agriculture dragged growth down in the first quarter of this year, with a 24% contraction in the sector.
Though the fall in agriculture’s share of GDP suggests the rise of secondary and tertiary sectors such as manufacturing and tourism, farming remains vital. Agriculture formally employs 1.28m people and 8.5m are directly or indirectly dependent on it.
President Cyril Ramaphosa spoke about the importance of agriculture in his state of the nation address in February, announcing a 14% budget increase to bolster its contribution to the economy.
Though SA is one of the least agriculture-dependent economies in Sub-Saharan Africa, the poor harvest weighed heavily on growth in 2015 and 2016, while the subsequent recovery boosted growth last year, says Capital Economics economist John Ashbourne.
According to the International Research Institute for Climate & Society, run by Columbia University in New York, there is a 60% likelihood that the El Niño effect will be felt in SA over spring and summer, placing the country’s water resources under strain. The likelihood of it arriving by midsummer is put at 70%.
FNB senior agricultural economist Paul Makube says: "In a nutshell, a possibility exists that we might have dry conditions prevailing during the new crop season."
This is bad news precisely because the economy hasn’t quite recovered since the last time El Niño struck. Growth has stayed below 2%. Plunging back into a drought could batter the weak economy even more.
Despite mounting fears, agricultural economist Wandile Sihlobo says that in the near term, this might have only minimal impact on agricultural commodity prices "until there is some level of confidence or clarity on the estimates".
What it means
Agriculture, though small in terms of GDP, employs many, and provides food security and but it could be hit by El Niño
However, the likely performance for this year is already looking gloomy.
The Agriculture Business Chamber of SA estimates that the agricultural sector could contract by up to 20% in the second quarter. Even though the first-quarter figure might be revised up somewhat, it is still expected to show a contraction.
Agriculture is coming off a high base in 2017, while the drought in the Western Cape, which makes up 20% of the sector, has also constrained it.
The maize harvest will only be partially factored in to th second quarter, which makes up about 20% of the harvest, says Sihlobo. The maize harvest has been delayed due to the season’s late start as a result of unfavourable weather conditions earlier in the year, particularly in the western parts of the country.
The sugar harvest also started late, as did the oilseed harvest.
It’s all bad news as SA waits anxiously for the GDP quarterly figures next week, which could drag the country into recession. The agricultural sector could keep the economy in the doldrums far longer.