By Jasper Raats
The Government of National Unity (GNU) offers an opportunity to reverse the years of mismanagement in South Africa, but the success will depend on how well industries such as agriculture and forestry can work with the state on structural reforms, said Michael Peter, CEO of Forestry South Africa (FSA), at Agri Mpumalanga’s recent congress at Witrivier.
Economic wind in the sails
“Credit rating company Standard & Poor confirmed South Africa’s ‘BB/B’ rating three weeks ago and maintained its outlook as ‘positive’ – an important sign to investors that reforms are starting to pay off.”
He also pointed out that despite international turbulence, the rand has strengthened by more than 5% against the dollar since June 2024, while the JSE’s overall index is close to 12% higher in 2025.
Regarding structural reforms, he said Pres. Cyril Ramaphosa’s Operation Vulindlela launched its second phase in May to accelerate reforms in energy, water, transport and digital communications. The presidency calls it a “second wave” to stimulate economic growth.
He also mentioned that Transnet Engineering had already officially started looking for private partners after Transnet was broken up into separate entities – a move that he believes alleviates logistical bottlenecks in agricultural exports.
Agricultural performance
Agriculture’s contribution to gross domestic product increased by an impressive 15.8% in the first quarter of 2025, and he believes it was the biggest contributor to the country’s overall growth.
According to him, the forestry sector alone has achieved more than R53 billion in new processing capacity, and another R11 billion is expected, which is a sign of investor confidence in the GNU.
Challenges
But South Africa’s countryside does have its fair share of problems. Peter said dilapidated roads, poor water supply and defective policing in rural municipalities remain a major risk to the agricultural value chain.
In addition, the Work for Fire programme’s budget has been cut, putting the firefighting capability under pressure. He urged farmers to strengthen their local fire protection associations as a matter of urgency.
Peter said that legislation at the national level is no longer as problematic for farmers as many provincial and municipal regulations and processes still are. However, he added that slow regulatory processes in the national departments of environmental affairs and agriculture continue to cause bottlenecks to licensing and the expansion of agricultural and agricultural-related activities.
Optimistic
He said he is more optimistic now than at any other stage in the past three decades. “The GNU brought political stability and a new enthusiasm for reform. Macroeconomic indicators show a gradual recovery, and agriculture is performing above expectations. Yet, communities, industry organisations, and the state must quickly remove any remaining obstacles, especially at the local level, to make this momentum sustainable.
“We have the opportunity to make South Africa’s rural economy shine again,” said Peter. “But it will only succeed if affirmative legislation is accompanied by hard work, good governance and stronger partnerships.”
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