An Economic Contributor
The tobacco industry makes a significant contribution to the national fiscus, and to the national economy.
However, our ability to contribute to the fiscus has diminished as the illicit sector has thrived. The industry’s Gross Added Value (GVA) to the country’s GDP was R48.4 billion in 2019 – but had dropped to R44.7 billion in 2022.
Illicit cigarette sales shaved more than R20-billion off our contribution to the national fiscus in 2023 alone, and resulted in the loss of R72.2-billion from 2020 to 2022.
The tobacco sector’s economic potential is significant, should the illicit sector be brought under control and if market share shifts back to legal tobacco product producers.
Source: Oxford Economics 2023
A Potential Job Creator
The tobacco value chain is a crucial source of income for thousands of families and communities, primarily in rural areas.
Tobacco leaf production provides stability and relative profitability compared to other agricultural commodities in South Africa. It supports, on average, 1.5 to 2 direct jobs for every one hectare of tobacco produced.
However, these jobs are under
increasing threat:
35,991 tobacco industry jobs have already been lost between 2019 and 2022, primarily due to the rapid growth of the illicit sector.
SATTA invests in local communities.
Our members help foster rural economic development in the provinces where they are active by working with local communities to create employment opportunities, educating farmers on sustainable farming, and investing in emerging farms.
The positive effects of tobacco farming, processing and manufacturing on the lives of participating farmers and their families include food security, educational benefits and opportunities, and increased and stable income.
A Transformer
The tobacco leaf farming sector encourages new farmers to start their own operations by accessing programmes which stimulate economic growth, support transformation and facilitate social inclusion.
Our members work with local communities to develop small and family-run farms to foster rural development in various provinces. They provide training and mentorship programmes to ensure that tobacco leaf farmers are equipped with the skills to work their lands in a sustainable, profitable manner.
However, SATTA believes additional investment is desperately needed in emerging farmers programmes. Government can and should play a much bigger role in creating an enabling environment for agricultural investment.
SATTA is currently developing a transition plan to accelerate the sector’s transformation process and ensure a dignified, sustainable future for black tobacco farmers.
A Rural Developer
Tobacco leaf farming often sustains new generations of farmers and can provide communities with safer long-term incomes, food security, and access to healthcare and education.
As SATTA, we are committed to further supporting rural and local communities to create employment opportunities and build sustainable farming projects.
We also actively help tobacco farmers diversify into other crops, because of the challenges the sector currently faces. We are in discussions with several provincial government departments to explore these opportunities.
SATTA believes the National Government should recognise the tobacco sector’s potential and invest in emerging farmers programmes, to create an enabling environment for agricultural investment.
A Social Contributor