The country’s winemakers are being affected by the effect of the natural disaster hitting South Africa.
Wine production, which in the past years has grown steadily and conquered new markets around the world, is down by 20 per cent.
The production of fruit and vegetables, including onions, potatoes and tomatoes, has also dropped by 15 per cent, as farmers had to plant less due to water shortages.
As South Africa is the world’s seventh largest wine producer, a decreasing in its production could heavily hit the country’s growth.
Paul Makube, agricultural economist at South Africa’s First National Bank, told CNBC that the wine industry is among “biggest foreign exchange earners”.
The country’s vineyards accounted for four per cent of global wine output in 2016.
The UK, Europe and the rest of Africa are South Africa’s wine major buyers.
The economic impact of the drought is higher than the country’s government previously anticipated.
Western Cape minister of economic opportunities Alan Winde called the situation a “national disaster” and called for emergency measures last week.
He said: “We need the drought to be declared a national disaster and an allocation from the new Cabinet for infrastructure investment in our dams – like Brandvlei and Clanwilliam.”
He added: “We will continue to invest in smart agriculture.
“Research is very important.
“A whole new water economy will come out of this crisis and we need to use lots of innovation in agriculture to ensure that the crisis enables us to remain competitive.
“You cannot compete if you have no products to compete with.”
South African sluggish economy has seen a growth at 0.8 per cent year-on-year in the third quarter of last year.
At the end of the year, the country also saw a 26.7 per cent rise in unemployment.
Rian le Roux, South Africa-based strategist at investment firm Old Mutual, told CNBC: “The Western Cape economy is about 13 percent of the national economy, so a 1 percent reduction in Western Cape gross domestic product growth takes about 0.13 percent off growth of the total economy.”
The drought, the worst that has ever been recorded in the region, is obliging Cape Town’s population to live on 50 litres of water a day, in an attempt to slow down the emptying of the water supplies.
The limit can be maintained only by flushing the toilet just once a day and limiting showers to 10 litres.
The so-called Day Zero, indicating the moment reservoirs in Cape Town will fall to 13,5 per cent of their capacity, is currently projected to fall on July 15, but experts are afraid it could arrive as early as next month.
Heavy rainfalls coming this winter might uplift the situation, but it is unlikely it will solve the crisis in Cape Town for good.
Tackling the problem requires a “permanent lifestyle change,” as explained by Mr Makube.