OPINION: SA needs to exploit opportunities cannabis industry has to offer
By Auntony Mukhwanazi
The negative impact of the Covid-19 pandemic on our economy can be reversed if government, business and society work collectively to establish a sustainable cannabis industry as one of the interventions.
The economy is projected to shrink by not less than 6% in 2020. Just before the pandemic hit our shores in March, the Centre for Development and Enterprise had just published a report looking at South Africa’s growing unemployment rate and what it calls a ‘job bloodbath’.
South Africa sits with cannabis-based dossiers for medicine that is proven successful to cure diseases such as diabetes, cancer, sleeping disorders, eating disorders, epilepsy and pain among many other ailments. The pharmaceutical capacity to exploit is ample and readily available in the country, given that we have manufacturing capabilities for textiles, biofuels, cosmetics, foods and beverages, and in all of these economic sectors, cannabis can be a source of raw material and ingredients.
Moreover, the country is blessed with cannabis greenbelts in Stellenbosch in the Western Cape, the Pondoland in Eastern Cape, the Bergville in KwaZulu Natal and other areas in Mpumalanga and Limpopo. There are literally thousands of hectares of arable land across the rest of the country that is suitable to grow cannabis.
The cannabis industry can be subdivided into four main categories: Medical (including additives or neurocriticals), Recreational (or responsible adult use), Seeds and Fibre. Each of these can further be subdivided into multiple categories resulting in over 25 000 everyday products that are consumed locally, across our borders throughout the African continent and all over the globe.
There are thousands of jobs that can be created on the cultivation value chain only. The seed segment of the cultivation value chain is on its own, a multibillion-dollar business.
There are tenths if not hundreds of different cannabis seed strains that have been developed in many different parts of the globe. South Africa is well known globally for having developed strains such as Durban Poison amongst others. Durban Poison is very popular in Europe (Netherlands, UK and Germany) as well as in Northern America (California in the USA and in Canada).
A thousand hectares of land requires a minimum of 7000 farm workers to plant, grow and harvest cannabis. Based on a job creation multiplier of three, this implies that a minimum of 21 000 direct and indirect jobs can be created just on cultivation only. Very quickly a target of 500 000 jobs per annum can be attainable on cultivation alone.
The raw material produced from these farms can then go into manufacturing of medicines, textiles, auto-mobile composites, bio-fuels, food and beverages, cosmetics, animal feed and further resulting in more jobs and economic growth.
Furthermore, by developing these farms, the government will also get the opportunity to test the practicality of their land reform legislation.
Cannabis is the green gold that requires implementation of a thorough and properly coordinated strategy by all stakeholders in the arena of economic development.
The South African cannabis market is estimated to be worth $7-billion (R121bn) by the London-based advisory group Prohibition Partners.
Government needs to move faster in providing the legislative framework. A new model for making funding provisions available to the much talked about sovereign fund can be tested.
Economic development agencies stationed at each province of the country should be commissioning feasibility studies to ensure projects are investment-ready for take-off in a sustainable manner. Labour formations have an opportunity to test equity-based participation of workers starting at “greenfield” level.
South Africans should brace themselves for a cannabis industry that will explode as soon as it meets with its source of ignition. Let cannabis be part of the solution to free our people from the wickedness of unemployment, inequality, poverty and diseases.
Auntony Mukhwanazi serves as Managing Director of Ntiyiso Industrialisation.