What do agriculture experts predict for South Africa's GDP growth in 2025?
There have been mixed reactions from the agriculture sector and economists on expectations for Tuesday's announcement of the GDP growth for the first quarter of 2025.
Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa (Agbiz), said, 'One sector that some may be observing is the performance of agriculture, which last year was a significant drag on the economy. The mid-summer drought, delays in harvesting deliveries, and animal diseases were some of the challenges we encountered in 2024.'
This year, the conversation should shift somewhat and become more upbeat. 'We have an excellent summer grains and oilseeds season, with the latest production forecasts by the Crop Estimates Committee suggesting a harvest of 17.98 million tonnes, up by 16% from the 2023-24 drought season. Favourable rains and decent area plantings support this,' he said.
Sihlobo said South African sugar production for the 2024-25 production season is forecast to recover by 7% year-on-year to 2.09 million tonnes. 'This is also due to favourable weather conditions and the availability of sufficient water for irrigation. We have also received encouraging production data from SA Wine and Vinpro, forecasting South Africa's wine grape harvest at 1.244 million tonnes, an 11% recovery from the exceptionally poor harvest of 2024. We also see encouraging production data from citrus, various fruits, and vegetables. In poultry production, the moderating prices of maize and soybeans should help the industry in its ongoing recovery.'
Sihlobo said the one area that remains a concern is the livestock industry, primarily due to the recent outbreak of foot-and-mouth disease. 'We have already seen various trading partners temporarily banning South Africa's beef exports due to the foot-and-mouth disease outbreak. Given the sizable share contribution of the livestock industry to South Africa's agricultural gross value added, its challenges are something worth reflecting on when considering South African agricultural performance.'
Francois Rossouw, the CEO of Southern African Agri Initiative (Saai), said the sector is certainly in a recovery period after the excessive rain the country had. 'It was positive to see a healthy jump in our exports in the first quarter of the year, helped a bit by things running smoother at the ports. However, there are big external challenges ahead, especially when it comes to securing good access to important markets like the US and navigating hurdles in promising places like China. So, while there's some positive momentum, the outlook is definitely shaped by these significant trade issues that need sorting out.'
Investec economist, Lara Hodes, said that they expect a weak quarter one 2025 reading, following quarter four 2024's 0.6% quarter-on-quarter seasonally adjusted lift, with incoming data readings for the quarter unfavourable.
Specifically, industrial production (mining, manufacturing and electricity), which makes up a substantial 19.5% of GDP, declined by -2.9% qqsa in the first quarter, while the trade sector, which makes up around a further 12.5% of GDP, disappointed, she said.
Hodes said the outlook is reflective of a still subdued economy, which continues to face a number of challenges, notably on the logistics front. 'Business Confidence is likely to have remained in contractionary territory at around 47, from 45 logged in Q4.24 and Q3.24 respectively. While political uncertainty has eased to an extent and the GNU is expected to endure, domestic growth remains lacklustre while global uncertainty remains elevated, with the tariff situation fluid.'
Johann Els, Old Mutual Group Chief economist, said that given the performance of high-frequency data, he expects GDP growth to be negative. 'I project GDP to be - 0.1% in the first quarter of 2025. This compares to a +0.6% growth in the last quarter of 2024. The reason for the negative projection is the severe production performance in the mining and manufacturing sectors. Mining production, with a weight of 4.8% into the economy, was down more than 16% on an annual basis quarter-on-quarter, and similarly, manufacturing production at a bigger weight of 12.5% of the economy was down 9% on an annual basis quarter-on-quarter.'
TLU SA general manager, Bennie van Zyl, said that there are so many interchangeables in the Agriculture sector that it is difficult to compare one year to next year. 'This is due to us having late rain, but it could still result in a good harvest. There are also farmers that haven't harvested yield yet due to the late rains. We also have farmers who are not able to sell cattle due to foot-and-mouth disease, so we have to wait and see. I'm cautious to make a prediction on the sector GDP growth.'
BUSINESS REPORT
Visit: https://businessreport.co.za/
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
37 minutes ago
- IOL News
Anger mounts as Trump's tariffs set to bite
Demonstrators burn a US flag and a picture of US President Donald Trump during a protest in defence of national sovereignty following the US government trade taxes and sanctions on Brazil, near the US consulate, in Sao Paulo, Brazil, on August 1, 2025. Thabo Makwakwa Analysts warn that the path ahead is fraught with challenges, including potential irreversible damage to sectors already under pressure following the recent imposition of a 30% tariff by the United States on key South African exports. They raised concerns about long-term economic stability, job security, and export revenue. Effective August 1, 2025, the new tariffs target key industries, including citrus, macadamia nuts, automotive components, steel, and aluminum. South Africa's citrus industry, which supports over 35,000 jobs and contributes more than R38 billion annually, faces disproportionate risk. Speaking to Sunday Independent on Friday, Dr. Iraj Abedian, Chief Economist at Pan-African Investments Research Services, highlighted the severity of the situation. "The tariffs will have a dire impact on our automotive and citrus industries. We're looking at an initial loss of around 100,000 jobs, especially in motor manufacturing, which feeds into a broader supply chain of tire, component, and leather producers." Abedian further explained that the Western Cape's citrus sector is uniquely vulnerable due to its climatic resilience against certain citrus diseases like black spot, which restricts exports to the US. Other regions lacking this advantage could see prices plummet, affecting the entire supply chain. "When the Western Cape exports are constrained, it affects prices and volumes in other markets like the Middle East, Europe, China, and Russia, creating a ripple effect across the industry." Beyond immediate impacts, industry experts warn of potentially permanent damage. Wandile Sihlobo, Chief Economist, emphasized that the tariffs threaten the fabric of South Africa's manufacturing sector, particularly those producing vehicles tailored for the US market. "When factories close due to these tariffs, they don't reopen easily, even years later. The investment required to establish a foothold in the US market is extensive, and once lost, it's nearly impossible to regain." He pointed out that industries such as automotive manufacturing, which produce both right- and left-hand drive vehicles for export, face the risk of shuttering facilities entirely. The consequences extend beyond jobs, impacting revenue streams and the country's long-term industrial capacity. Sihlobo also highlighted the broader implications for South Africa's trade relations. The US's move increases the vulnerability of South African agricultural exports, such as ostrich products, table grapes, nuts, and wines, to competitors from nations like Peru and Chile, which face lower tariffs. "South Africa now faces a significant disadvantage, as our exports are taxed at around 30%, while Peru and Chile enjoy tariffs closer to 10%. This disparity undermines our competitiveness." He noted ongoing negotiations between South Africa and US officials, with the government actively seeking more favorable terms. However, Sihlobo cautioned that such talks are complex and protracted, especially given the US's recent trade tensions with other major partners like the European Union and Japan. "The negotiations are challenging, and the current environment of global uncertainty makes it difficult to predict outcomes. Still, we continue to support our government's efforts to advocate for our industries," he said. With the US accounting for approximately 8% of South Africa's total exports, particularly in vehicles (17%) and agriculture (5%), the impact of these tariffs could be profound. Higher costs for US buyers are expected to reduce demand, threaten supply chains, and diminish South Africa's export earnings. Economic analysts warn that the tariffs could accelerate job losses, depress public revenues, and deepen existing economic vulnerabilities. "This is not just a short-term setback. The damage could be long-lasting, and reversing it will require years of concerted effort and strategic investment, said Abedien. The experts warned that South Africa's industries must brace for a challenging period ahead. The Federation of Unions of South Africa (Fedusa) said that while it did not subscribe to alarmist projections of a 'jobs bloodbath,' it was mindful that implementing such measures could profoundly impact South Africa's export-led industries, particularly the automotive sector. 'The proposed tariff would render South African automotive and manufactured goods significantly more expensive and less competitive in a vital export market. 'A contraction in demand would almost certainly force firms to scale down production, with downstream effects that include shift reductions, deferred investments, and potential job losses over time,' Fedusa said. The president of the General Industries Workers Union of South Africa, Mametlwe Sebei, said the country risks losing access to the US market due to unmet requirements influenced by shifting global politics and policies. 'When you look at AGOA, the US Congress has specific requirements for Africa, and many US Congress members have pointed out that South Africa is not meeting these. This has been an ongoing issue, even in the past. 'Secondly, given policies on Israel-Palestine, and the current focus on China and Russia as a bloc, the global economy is shifting, and it's unlikely that South Africa will maintain the privileged access it currently enjoys to the US market,' said Sebei. He argued that if South Africa wants to transition toward manufacturing vehicles, it must mobilize resources and industry capacity to meet the country's transport and manufacturing needs. However, he expressed skepticism about current ambitions and the capacity to achieve these goals. Meanwhile, President Cyril Ramaphosa has announced that negotiations with the United States will continue over the next week. Ramaphosa said that ongoing communications between South Africa and US officials continued on Friday, adding that the government has submitted a Framework Deal to enhance mutually beneficial trade and investment relations.
IOL News
5 hours ago
- IOL News
30% Tariffs from the US government, 0% Leadership from the GNU government
Trade tensions between SA and the US, and represents a direct threat to thousands of South African jobs in key export sectors such as automotive manufacturing, agriculture, and mining. Image: Armand Hough /Independent Newspapers Build One South Africa (BOSA) expresses deep concern over the imposition of 30% tariffs on most South African imports to the United States, which will come into effect after a seven-day window. This marks a serious escalation in trade tensions between SA and the US, and represents a direct threat to thousands of South African jobs in key export sectors such as automotive manufacturing, agriculture, and mining. The outcome is not solely the result of an increasingly protectionist White House. It is a self-inflicted wound caused by years of incoherent and ideologically driven foreign policy from the South African government. What should have been a moment for skilled diplomacy and strategic engagement has instead become a textbook case in diplomatic failure. Key opportunities to repair and restore trust with US lawmakers and officials were squandered. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Even under the more diplomatic Biden administration, South Africa failed to rebuild trust. We did not use the opportunity to engage, negotiate, or reassure. And now, under a more transactional Trump presidency, patience has run out. What is clear is that South Africa urgently needs a foreign policy rooted in clear principles and strategic interests instead of nostalgia and ideology. Our diplomacy must be led by the state, above party politics, and laser-focused on three core objectives: expanding trade and economic growth, defending human rights, and advancing democracy on the continent and beyond. The current bipolar approach, with mixed signals from different actors, is unsustainable and deeply damaging. BOSA calls for five urgent steps to arrest this crisis and rebuild South Africa's credibility in Washington: Reassert official diplomatic leadership and prevent political freelancing that undermines national trade priorities. South Africa must speak with one credible, united voice. Engage directly with the US Congress, where AGOA's future will ultimately be decided. The case must be made for the mutual benefits of continued trade cooperation and use the over 500,000 US jobs linked to trade with South Africa as leverage. Present a credible trade and investment plan that highlights the potential of key export sectors and aligns with US strategic interests, especially in green energy and technology. Commission an urgent economic risk assessment to quantify the impact of these tariffs on jobs and industries, and guide responsive, sector-specific relief measures. Appoint a qualified ambassador to Washington who understands the intersection of economics and diplomacy and can lead the high-level engagements needed to restore trust and rebuild lost ground. South Africa cannot afford more indecision, ideological posturing, or diplomatic negligence. Our future economic growth depends on pragmatic, clear-headed leadership in foreign policy that puts South African jobs front and centre. Roger Solomons - BOSA Spokesperson
The Citizen
10 hours ago
- The Citizen
Top 10 stories of the day: Ramakgopa on tariffs and BEE, Aarto commencement date, Mbeki, Appollis and more
Here's your daily news update for Saturday, 2 August 2025: An easy-to-read selection of our top stories. In the news today, Minster of Electricity Kgosientsho Ramakgopa denied suggestions that the United States' 30% tariffs on South African trade was a result of the country's broad-based black economic empowerment (B-BBEE) policy. National government gazetted the commencement dates of the Aarto demerit system in a staggered implementation of the Aarto Act, as the Organisation Undoing Tax Abuse (Outa) and the Construction Education Training Authority (Ceta) engaged in a war of words over alleged corruption. Orlando Pirates' new signing Oswin Appollis made an impressive debut for the Buccaneers in the MTN8, while SA's hottest artists are reflecting on a glitzy evening at the Basadi in Music Vanguard Awards. Weather forecast According to the South African Weather Service (SAWS), rain and showers are also likely in the south-western parts of the country heading into Monday. Otherwise, partly cloudy and cool to warm conditions are expected in other parts of the country, it said. SAWS also said a cold front will hit the Western Cape on Monday, along with rainfall. It expects the cold front and rainfall to move to the Eastern Cape on Tuesday. Stay up to date with The Citizen — More News, Your Way. Ramakgopa dismisses claims US tariffs target BEE policy, but admits it needs tweaking From August, South Africa will be lumped with a 30% tariff on goods traded with the United States after President Cyril Ramaphosa's administration failed to negotiate a deal with their American counterparts. Electricity and Energy Minister Kgosientsho Ramokgopa during a ANC media briefing on 2 August 2025. Picture: X / @MYANC Ramakgopa said the tariffs had 'huge economic implications' as they threatened jobs but said the situation was forcing the country to look for more agreeable trading partners elsewhere. Read more: Ramakgopa dismisses claims US tariffs target BEE policy, but admits it needs tweaking Extortion suspect killed in shootout with Eastern Cape police Police investigating an alleged extortion ring in rural Eastern Cape were in a gunfight with a suspect on Saturday afternoon. Picture: Saps The suspect was travelling with a passenger who left the scene unharmed, but in custody to undergo further interrogation. Read more: Extortion suspect killed in shootout with Eastern Cape police Khampepe Commission is the right platform for Mbeki, Mabandla to tell their story, court rules Former president Thabo Mbeki and ex-justice minister Brigitte Mabandla lost a court battle to intervene in a damages case related to the failure to prosecute apartheid-era crimes. Former president Thabo Mbeki. Picture: Gallo Images The case related to claims that between 1998 to 2017, the government actively blocked investigations into Truth and Reconciliation Commission-referred matters. Read more: Khampepe Commission is the right platform for Mbeki, Mabandla to tell their story, court rules Haven't filed your tax return yet? Here's how to avoid mistakes It is tax season again, which means it is time for taxpayers to stress pleasing the bean counters at the South African Revenue Service. Picture: iStock Here is some expert advice from top professionals in South Africa's investment and finance industry. Read more: Haven't filed your tax return yet? Here's how to avoid mistakes Union expects 'mass exodus' of pilots as 12-day Flysafair strike ends FlySafair confirmed on Friday that its management had signed a formal agreement with the trade union Solidarity to end the pilot's strike. Fkysafair Boeing 737-844 with green and gold in support of the Springboks. Picture: Gallo Images/Jaco Marais However, Solidarity spokesperson Helgard Cronjé believed the mediation process came at a high cost and could have been resolved earlier. Read more: Union expects 'mass exodus' of pilots as 12-day Flysafair strike ends Government announces when Aarto demerit system will start Clauses relating to the Administrative Adjudication of Road Traffic Offences (Aarto) demerit system will come into effect next year. Picture: Nigel Sibanda. Implementation of the act will be done in phases, beginning in December for some municipalities. Read more: Government announces when Aarto demerit system will start 'The public deserves better': Outa and Ceta trade barbs after protest Outa protested outside the Ceta offices earlier this week, with the two organisations trading heated words over allegations of corruption and mismanagement. Outa protested outside the Ceta head office in Midrand on Thursday. Picture: X/@OUTASA Outa CEO Wayne Duvenage is wanting an audience with newly appointed Minister of Higher Education and Training Buti Manamela to discusses the authority's effectiveness. Read more: 'The public deserves better': Outa and Ceta trade barbs after protest Appollis helps Pirates make perfect start to MTN8 title defence Buccaneers debutant Oswin Appollis was on the scoresheet as his new employers registered a win in the MTN8 quarterfinals. Oswin Appollis and Patrick Maswanganyi celebrate a goal during the 2025/26 MTN8 quaterfinal match between Orlando Pirates and Polokwane City at Orlando Stadium in Soweto on Saturday. Photo: Sydney Mahlangu/BackpagePix The win gave new coach Abdeslam Ouaddou the perfect start, who was thrilled with the domestic season-opening victory. Read more: Appollis helps Pirates make perfect start to MTN8 title defence Laconco, Lootlove and Relebogile Mabotja among big winners at Basadi in Music Vanguard Awards The Vanguard Awards recognise women in often-overlooked roles – from managers and producers to stylists and other creatives who drive the industry's success stories. TV personality Luthando 'Lootlove' Shosha won entertainment radio presenter of the year. Picture: Nigel Sibanda The evening also saw special honours awarded to two trailblazing women. Read more: Laconco, Lootlove and Relebogile Mabotja among big winners at Basadi in Music Vanguard Awards
