Industry bodies Agri SA and the Agricultural Business Chamber of South Africa (Agbiz) agree that Finance Minister Enoch Godongwana’s Medium Term Budget Policy Statement (MTBPS) shows that government is still committed to stabilising debt and to maintaining primary budget surpluses.

The organisations have welcomed the Minister’s emphasis on growth, infrastructure and fiscal reforms, which Agbiz, in particular, views as essential for the long-term growth prospects of South Africa.

Agbiz desires, however, more clarity about the economic policy path of the country when the Government of National Unity releases its economic policy documents next year and through the updated Operational Vulindlela – the Presidential programme driving structural reforms across various industries.

The agriculture sector requires better functioning infrastructure, including roads, rail, water and electricity, as well as better-functioning and well-funded municipalities.

For Agri SA, government’s acknowledgement of the urgent need to align spending with revenue marks a critical turning point. The organisation welcomes Godongwana’s focus on GDP growth as the primary driver for addressing fiscal imbalances.

“For agriculture, the MTBPS brings promising news,” Agri SA states, highlighting that government’s spending is projected to increase from R2.4-trillion in 2024/25 to R2.8-trillion by 2027/28, which is seen as a positive prospect.

Notably, the economic development allocation, targeting growth and job creation programmes in sectors such as agriculture and tourism, is set to be the fastest-growing budget category with an average increase of 7.8% over the Medium-Term Expenditure Framework period.

Agriculture and rural development will receive 3% of this allocation, which Agri SA CEO Johann Kotzé deems a crucial boost that underscores agriculture’s central role in the economy.

Agri SA is also encouraged by the government’s firm stance against further bailouts for struggling State-owned enterprises, instead prioritising targeted investments in sectors such as agriculture, infrastructure and energy.

“This shift represents a forward-thinking approach to overcoming systemic inefficiencies that have long constrained economic growth,” Kotzé says.

However, the MTBPS underscores the ongoing challenges in public infrastructure, particularly in logistics, which directly impact the agricultural value chain.

Agri SA continues to advocate for private-sector partnerships to help address critical infrastructure needs.

“Godongwana’s emphasis on job creation and increasing private-sector participation remains crucial for stimulating investment and broadening the tax base.

“We believe the successful implementation of these initiatives, coupled with targeted infrastructure improvements as highlighted in the MTBPS, are key to unlocking sustainable economic growth,” Kotzé states.

Agri SA concludes that the agriculture sector relies on efficient logistics, a continued stable energy supply and an environment conducive to investment.

“Collaboration between the public and private sectors will be essential to achieving our shared vision of a prosperous and resilient economy.”