Abstract

Gary Villiers Tambo, Winnie Nadine Els, Hansie Shaun Neil, Jonty F. Barnard and Justine Morgan

South Africa’s agricultural sector is comprised of livestock, field crops and fruit in their order of size, in gross
value terms. Agriculture in South Africa accounts for a relatively low share in the economy (3% of gross
domestic product - GDP), 6% of employment and about 10% of exports (over R144 billion in 2015). Currently
(2015/16), South Africa is experiencing the worst drought in over 100 years, which has resulted in significant
effects on agriculture, with eight of the nine provinces being declared disaster areas. The motivation of the
study was to understand the severity of drought on agriculture as well the impact on the whole economy (to
quantify the economy-wide effects/losses emanating from the drought). To quantify these effects a singlecountry computable general equilibrium (CGE) model was used. Four scenarios were developed: Impact of
field crops losses; impact of livestock losses; impact of aggregated agriculture losses; and impact of
aggregated agriculture losses plus drought relief. The analysis shows that all scenarios led to a negative
impact on GDP, employment and exports while the drought relief was found to have saved some jobs, albeit
not significantly.