Good news about South Africa’s largest employer
Things are looking up for South Africa’s agriculture sector this year, as the challenges facing the sector in 2024 have largely subsided.
This is according to the Agricultural Business Chamber of South Africa’s chief economist, Wandile Sihlobo, who told Newzroom Afrika that the country’s agriculture sector is set to recover in 2025.
2024 was a difficult year for the sector, with the latest GDP data for the third quarter of last year showing that the sector experienced its deepest slump in at least three decades.
Stats SA reported that the agricultural sector contracted 15.5% in the first nine months of the year and 28.8% in the third quarter as drought curbed the output of crops such as corn, soybeans, wheat, sunflowers, and vegetables.
This contributed -0.7 of a percentage point to the negative national GDP growth.
It should be noted that, since the release of this data, Agri SA asked the Bureau for Food and Agricultural Policy (BFAP) to review Stats SA’s data.
BFAP’s analysis, released late in 2024, showed that the farming industry had shrunk about 5% to 6% and that Stats SA should consider an “upward revision” of about R10.8 billion for agricultural gross domestic product after accounting for inflation.
However, BFAP’s analysis still showed a contraction in the agricultural sector, which had been under significant pressure over the past few years.
Sihlobo explained that agriculture is often divided into three subsectors, all of which have experienced certain challenges over the past few years.
The first subsector is horticulture, which includes products like fruit and vegetables. The second is field crops, which encapsulate products like grains, oil, seeds and sugar cane.
The third subsector, livestock and poultry, is the largest in South Africa and accounts for half of the country’s farming economy.
Sihlobo identified the first big challenge in 2024 as the midsummer drought that led to a poor performance for grains and seeds, with production down 23%.
The second challenge was animal diseases within the livestock industry. Many poultry producers are still recovering from a widespread avian flu outbreak in 2023, which saw these companies lose millions.
However, Sihlobo said all of these challenges have since eased, with good rainfall in 2025 expected to benefit the agriculture sector.
“Although the production may not be as robust as some initially anticipated, nonetheless, it will be better than what we saw last year,” he said.
“We are also getting control of the animal diseases. Only two provinces now still have a few areas of problems.”

In addition, Sihlobo said stable electricity assisted the sector in 2024, which is set to continue in 2025.
“We irrigate about 20% of our field crops – a lot depends there on rainfall – but when it comes to fruit and vegetables, all of that is under irrigation,” he explained.
“The dam levels are healthy in a number of areas of South Africa, so we do need that stable electricity supply to support all of our fruit and vegetable production.”
“Even beyond that, when you think about people that are in dairy, food processing, and also within the meat production side – they need stable electricity.”
Eskom’s outlook for the year shows that the positive electricity supply South Africa experienced in 2024 should continue into this year.
Eskom told Daily Investor that the average unplanned unavailability for this summer is about 11,500 MW.
This is about 1,500 MW lower than the base case assumption for the Summer Outlook shared in August 2024. At this level of unplanned unavailability, no load-shedding is anticipated.
However, Eskom also provided its worst-case scenario, with the heightened risk indicated on the longer-term outlook based on the Summer Outlook assumption for unplanned unavailability of 13,000 MW.
Therefore, despite Eskom’s good performance over the last nine months, the utility’s 52-week outlook for 2025 still predicts a likely risk scenario where there will be a shortfall.
The outlook shows a likely risk scenario where Eskom will have a shortfall of over 2,000 MW for most winter months.
However, Eskom explained that the unplanned unavailability assumption may be too aggressive in this forecast and will most likely not occur.
Sihlobo said optimism in the agricultural sector can lead to higher employment in the sector.
“If we see this optimism in agriculture, then even in terms of farm jobs, we will be good,” he said.
“We have just under a million people that are working in primary agriculture, and there’s the possibility to absorb other people if the sector continues to do well.”
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