Standard & Poor’s (S&P’s) decision to downgrade South Africa’s sovereign debt to junk status will have a significant impact on the country’s agribusiness sector, with a knock-on effect on consumers, agricultural business chamber Agbiz said on Friday.
CEO Dr John Purchase explained that the downgrade would impact food security, noting that the “irresponsible” political developments would, in time, manifest in higher food prices, and severely compromise the country’s “good food security status”.
“It is especially the poorest of the consumers that will suffer the most,” he said, adding that the timing of these developments was “most unfortunate”, as there were already clear signs of improved growth prospects in both the agrofood sector and the country’s economy.
He said agribusinesses would now have to carefully analyse the concomitant risks associated with such a downgrade and develop strategies to adapt to and survive in a business environment that is in all probability not going to be favourable.