The economic rationale for agricultural regeneration and rural infrastructure investment in South Africa

Abstract

This paper quantifies the role of agriculture in the South African economy. This is done within the context of, inter alia, food security, agriculture’s contribution to gross domestic product (GDP), economic linkages and multipliers with respect to the agricultural sector, agriculture’s employment creation capacity and its external stabilization capacity. The rationale for rural infrastructure investment is then investigated. The quantification of the agricultural sector in relation to the total economy and that of agricultural and rural infrastructure investment, are investigated against the backdrop of declining government support, increasing production risks due to a variety of exogenous events, like climate change, and increasing dynamic trade impacts. In this paper, the authors offer both supporting arguments in terms of current economic policy and recommendations for more decisive policy measures for agricultural regeneration and rural infrastructure investment.