The Impact Of Recent Dry Spell On South African Economy
South Africa is confronting one of the largest exceedingly terrible droughts ever seen. This dry spell had begun all the way back since 2015. This dry spell has caused several disasters in South Africa's economy. The country is now facing water scarcity and is getting ready for day zero which is the day where all the taps will run dry. Scarcity is the economic problem of having boundless needs and wanted in a universe of restricted resources. From the time of 1904 every one of the 9 provinces have had an annual precipitation value of 608mm for each year whereas during 2015 the nation got only 403mm 66% of the normal average before the most reduced precipitation got in a year was during 1945 when the nation got 437mm 72% due to this dry spell a lot of production in the country is declining causing chaos around the nation. South Africa's dry spell is affecting the entire country nation. The four factors of production: land labor capital and enterprise is being damaged critically which has shown various negative outcomes on the nations economy.
Land is the physical region where economic activity happens. Land is all the natural resources of a nature. Land in Africa is mainly used for farming. Agriculture and farming is 10% of employment in the nation but since there’s lack of water it’s restricting the growth of crops and plants. Only 13. 5% of farmland can be utilised for production and only 3% is top quality land. Wine production has gone down by 20% and foods production has gown down by 15%. This is because the farmers are compelled to use minimal water producing lower quality goods. Labour demonstrates the quantity of individuals that transforms all the resources to good and services that can be bought. Even though the country has an unemployment rate of 25% they still have a workforce with an excess of 18 million individuals. From these 18 million, 685000 labours work in the agricultural and farming sector. However there is a predicted loss of 50000 jobs due to the drought. R40m has been lost from farmers wages as farmers cut back from planting to save water. This shows opportunity cost (the next best alternative) as the farmer chose between the paying labours money or using money for crops and plants.
Capital is the all the machines tools and building humans use to to produce good and services. Mining is a really big sector in South Africa’s Economy. South Africa is known world-wide for having many coal-power stations and factories mining for different goods. However, these power stations and factories have stopped producing the same amount of goods ad they would have years ago. The factories have stopped producing the same amount because now the companies have to find different ways to use water. A average amount of water needed for coal mining is 70-260 gallons a day. This is why now companies like the DRDGold is using sewage water for mining. The company has about 6 million litres of sewage water going to its new water sewage plant which is used for gold mining.
Enterprise is consolidating all the factors of production to create company or business that is run by an entrepreneur. An entrepreneur has the risk-taking capacity to start and conduct a business. A lot of entrepreneurs have invested in tea farms mining and factories in South Africa. However because of the drought many companies have declined causing a lot of loss. Now many entrepreneurs need to make an opportunity cost where (a company or government has to make the hard decision due to the scarce resources) of either retrenching labor or cutting their pay. In conclusion, the whole South African economy has been highly affected by this drought. The Western Cape itself equals to 13% of the countries GDP. If the province loses 2% of its output than the GDP (Gross Domestic Product) will fall 0. 26%. South Africa is in a really big economic crisis and it's not going away anytime soon.
