KOPANO MONAHENG
THE ongoing conflict in the Middle East has impacted the global spike in fuel prices, making everyday life harder for people in South Africa, and worldwide.
The ever-increasing prices of food are putting more strain on the already lower-class.
Brendan Jacobs, head of agribusiness for business & commercial banking at Standard Bank South Africa, said farming is the most impacted industry at this point in time.
“From an agricultural perspective, the first increase in rates since May 2023 comes at a bad time given the high debt load in the sector,” he said.
The lower class are the most impacted the most. The Reserve Bank has increased the benchmark repo rate by 25 basis points, taking the repo rate to 7% and the prime lending rate of 10 and a half percent.
More expensive debt in the same cycle as rising input costs and locomodity prices with an upcoming predicted El Nino with a phenomenon in late 2026 makes for a time when the sector needs to focus on efficiencies whilst remaining productive.
“We believe that the resilience of the sector and coordinated efforts of role players across the value chain will ensure continued performance in the sector,” concluded Jacobs.
