AGRI INJECTS 3% OF SD’S BUDGET

Johannesburg – Despite calls for increased revenue allocations towards agriculture to drive economic growth, this sector of the economy contributes only three per cent of the country’s total revenue.

The 2017 African Tax Outlook, which has been published by the African Tax Administration Forum (ATAF), has uncovered that in fact, it is industries and tertiary services sectors that make a significant contribution to total revenue when compared to other 21 African countries referred to as ATO Countries. These countries, which were represented by officials from revenue authorities and journalists from different media houses are: Botswana, South Africa, Mozambique, Kenya, Lesotho, Gambia, Liberia, Mauritius, Seychelles, Tanzania, Togo, Uganda, Zambia, Cameroon, Rwanda and Senegal, among others. 

For the kingdom, industries were reported to have contributed slightly above 10 per cent, while services contributed nearly 60 per cent.
Compared to other countries such as South Africa and Zambia where agriculture contributes about two per cent, the kingdom was seen to be better performing in terms of the agricultural sector’s contribution to total revenue. This improved contribution of agriculture into the kingdom’s overall revenue despite recent statistics published by the Central Bank of Swaziland (CBS), which reflected that Swaziland highly depends on South Africa for agricultural produce, importing over E1 billion per annum.

The allocation by Minister of Finance Martin Dlamini of about E1.4 billion to the Ministry of Agriculture, which was about 6.8 per cent of the total E21.8 billion budget, was recently criticised on the basis that it has a major contribution to the economy.     

For countries such as Nigeria, Rwanda and Seychelles, the agricultural sector literally made no contribution to total revenue. It was, however, clarified by ATAF that the sum of the revenue might be not exactly 100 per cent because not all revenue could be attributed or revenue was attributed to two sectors of the economy.

“Data relates to calendar year 2015 or fiscal year 2014-15,” according to the report signed off by ATAF Council’s Babatunde Fowler and presented to media personnel at the ongoing first ATAF training workshop.
In the report, it has been explained that not only does agriculture contribute less tax than industry and the services, but countries where it accounts for a high share of GDP tend to have a lower tax-to-Growth Domestic Product (GDP) ratio.

It was pointed out that there were also countries where agriculture’s contribution to output is high but which have relatively high tax-to-GDP ratios, such as Togo. “Conversely, there are countries like Swaziland with low tax-to-GDP ratio where agriculture contributes relatively little to GDP. Another reason for differences in tax outcomes might lie in how efficiently tax administration ensures participation in compliance with the tax system,” ATAF observed. It was explained that efficient countries were likely to boast higher revenues than inefficient ones with the same tax rates and base.

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