Agriculture remains a key driver of foreign exchange earnings, yet persistent logistics failures threaten growth. As fiscal discipline returns, NAMC economist Buhlebemvelo Dube warns that without urgent reforms in transport and biosecurity systems, export expansion could stall.
South Africa’s fiscal outlook is stabilising. Whether that stability leads to stronger export growth, especially in sectors like agriculture, will depend heavily on logistics reforms.
The budget deficit is expected to decrease from 4.5% of GDP in 2025/26 to around 3.1% by 2028/29, while the primary surplus rises above 2 % of GDP. After more than a decade of steady increases, public debt is forecast to level off at 79% of GDP before gradually declining. This shift is significant.
A stabilising debt ratio reduces rollover risk, lowers sovereign spreads, and decreases borrowing costs across the economy. Fiscal credibility, which had weakened in recent years, is slowly being restored.
Impact of agricultural exports
Real GDP is expected to rise from about 1.4% in 2025 to roughly 2% by 2028. Those numbers are sufficient to prevent the debt ratio from drifting upward again. They are far less convincing as a growth strategy. At that pace, unemployment declines only marginally, and household incomes improve slowly. The constraint becomes clearer when the external sector is considered.
South Africa exported roughly $110 billion worth of goods in 2024. Agriculture accounted for $13.7 billion of that total and generated a trade surplus of more than $6 billion. Few sectors consistently deliver foreign exchange earnings of that magnitude.
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For that reason, agriculture plays a larger macroeconomic role than its share of GDP suggests. Export earnings support the balance of payments, stabilise the currency and sustain rural incomes across large parts of the country. Direct budget allocations to the sector remain relatively small. Agriculture and rural development received about R39.5 billion in 2026/27, just over 1.5% of consolidated expenditure.
What matters more than transfers is infrastructure. Export agriculture depends heavily on logistics. Rail reliability, port turnaround times and sanitary systems determine whether products reach international markets quickly enough to preserve value. When those systems work poorly, the losses are immediate and measurable.
The fiscal projections assume export growth of around 1.6% in 2026, rising to just below 3% by 2028. That trajectory suggests gradual improvement rather than a structural shift. At the same time, the current account deficit is expected to widen slightly, implying that export growth may struggle to keep pace with import demand as investment recovers.
Infrastructure and logistics
It is also a concern that infrastructure failures remain a central risk.
Rail bottlenecks and recurring outbreaks of foot-and-mouth disease continue to disrupt export supply chains. In sectors built around high-value perishable products, delays of even a few days can erase margins.
Reducing port dwell time by a measurable margin would probably raise export receipts more than incremental adjustments to fuel levies or other indirect costs. The deeper issue is productivity. With fiscal policy now moving into surplus, demand stimulus will play a limited role in lifting growth. Expansion must come from improvements in efficiency and competitiveness.
Trade-exposed sectors are well placed to provide that lift. If logistics reform strengthens export capacity, agricultural export growth could move beyond the current 2-3 per cent range. That would improve the current account balance, support the currency and reinforce the fiscal consolidation effort.
If reform stalls, the opposite outcome becomes more likely. The economy remains stable but is slowly growing.
In short, South Africa has taken an important step by restoring fiscal discipline, and the agricultural sector must deliberately capitalise on this environment and ensure it pushes its exports through diversification and improved market access.
- Buhlebemvelo Dube is a trade economist at the National Agricultural Marketing Council (NAMC). The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of Food For Mzansi.
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