Confidence in South Africa’s agricultural sector saw a sharp uptick as political uncertainty eased following the formation of a broad governing alliance post-election.
According to the latest figures from the Agricultural Business Chamber (Agbiz) and the Industrial Development Corporation (IDC), the agricultural confidence index rose to 48 points in the third quarter through September, up from 38 points in the previous quarter. This marks the highest level since the third quarter of 2023.
“The heightened pessimism in the previous survey was largely driven by election-related uncertainty. With the establishment of a government of national unity, that concern has been alleviated,” said Wandile Sihlobo, Agbiz’s chief economist, in a statement released on Monday. “Attention has now shifted back to core agricultural issues.”
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The African National Congress (ANC) formed a unity government with centrist rivals, including the Democratic Alliance, after losing its parliamentary majority in the May 29 elections. This political shift has bolstered investor and business sentiment, helping to strengthen the rand and South African bonds as market participants anticipate accelerated economic growth and reforms.
However, concerns in the agricultural sector persist, as reflected by the confidence index remaining below the neutral mark of 50, according to Agbiz. The outlook is still clouded by challenges such as the severe drought that impacted the 2023-24 summer crop season, poor municipal services, and ongoing logistical difficulties.
“Despite continued efforts to strengthen cooperation with Transnet, the state-owned rail and port operator, improvements in port efficiency are still needed,” Sihlobo added, noting that Transnet’s underperformance remains a key obstacle to South Africa’s broader economic progress.
