Agri SA welcomes the Government’s pro-growth agenda

30 October 2024

AgriSA welcomes the pro-growth agenda outlined by finance minister Enoch Godongwana in his 2024/25 Mid-Term Budget Policy Statement. The first policy statement under the new Government of National Unity (GNU) administration, the statement aims to chart a course for navigating South Africa through complex economic challenges.

Its core focus on inclusive growth emphasises macroeconomic stability, structural reform, support for growth-oriented infrastructure, and a capable state. Minister Godongwana’s pronouncements in the statement give a preview of the priorities we can expect in the main 2025 budget.

The government’s acknowledgement of the urgent need to align spending with revenue marks a critical turning point, and Agri SA applauds Minister Godongwana's focus on GDP growth as the primary driver for addressing fiscal imbalances. For agriculture, a vital sector in South Africa’s economic recovery, the MTBPS brings promising news.

Total government spending is projected to rise from R2,4 trillion in 2024/25 to R2,8 trillion by 2027/28. Notably, the economic development allocation, targeting growth and job creation programs in sectors like 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 (MTEF) period. Agriculture and rural development will receive 3,0% of this allocation, a crucial boost that underscores agriculture’s central role in the economy.

AgriSA is encouraged by the government’s firm stance against further bailouts for struggling state-owned enterprises (SOEs), 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.

However, the statement 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.

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

“As Agri SA, we believe the successful implementation of these initiatives, coupled with targeted infrastructure improvements as highlighted in the MTBPS, is key to unlocking sustainable economic growth,” says Johann Kotzé, CEO of Agri SA. “A thriving agricultural sector relies on efficient logistics, a stable energy supply as we have witnessed for much of 2024, 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.”

Issued by Johann Kotzé, AgriSA CEO, 30 October 2024