Dark clouds for two of South Africa’s largest employers
South Africa’s agricultural and manufacturing sectors are facing extreme pressure amid heightened global uncertainty.
Both sectors are key employers in South Africa, and are among the largest exporters in the country.
When it comes to agriculture, Casey Sprake, an Economist at Anchor Capital, said that the sector is one of South Africa’s largest employers and a key driver of rural development.
The sector also has direct implications for livelihoods, fiscal health, and social stability.
The latest data from the Bureau for Food and Agricultural Policy (BFAP) also showed that agricultural exports rose by around 8% YoY to R71.5 billion in Q2 2025.
This was 60% higher than Q2 2020 and almost double the value recorded pre-pandemic in 2019.
Importance, on the other hand, fell by 6%, marking the first decline in agricultural imports in five years, leading to a healthier net-trade position.
“Beyond the numbers, the economic implications are clear. In a context of muted national trade, agriculture’s outperformance is helping to steady the external accounts and support the rand,” said Sprake
“Rising export receipts and lower imports provide a valuable buffer against global headwinds.”
However, Sprake said that sustaining this momentum will not be easy, especially due to structural bottlenecks, including port congestion and rail inefficiencies.
Rising input and transport costs also continue to erode competitiveness and limit the pace of export expansion.
“These logistical constraints act as a hidden tax on trade, often offsetting the productivity gains achieved on farms and in processing facilities.”
“Without faster reform and investment in transport and port infrastructure, the sector’s full potential will remain constrained.”
Global dynamics are also changing, with protectionist measures, disease-related trade disruptions, and climatic volatility posing major threats.
She added that the US tariff move illustrates how quickly access to major markets can narrow, especially in an increasingly fragmented global trading landscape.
“To navigate this environment successfully, South Africa will need both diplomatic agility and strong domestic capacity, thereby ensuring that its agricultural products remain competitive, compliant, and market-ready.”
Manufacturing bleeds
While the agricultural sector has seen substantial growth over the last decade, this has not been the case for the manufacturing sector, which has haemorrhaged jobs over the same period.
As reported by Daily Investor, between 2008 and 2024, the manufacturing sector shed about 450,000 jobs, driven by South Africa’s deindustrialisation over this period.
The sector’s recent struggles also include high tariffs, global competition and local headwinds as well, such as ArcelorMittal South Africa’s long steel plants being wound down.
Coface economists Aroni Chauduri and Noémi David highlighted the struggles facing the manufacturing sector over the past few decades.
While there have been employment gains in the services sector at a compound annual growth rate of 1.4%, the manufacturing sector has seen a compound annual growth rate of -1.5%
Chaudri and David noted that manufacturing’s declining investment aligns with South Africa’s poor economic performance and low levels of investment.
South Africa’s economy has seen an annual average growth decline from 4% in 2008 to 0.8% or less over the past two decades.
Since the Global Financial Crisis in 2008, South Africa has seen a massive deindustrialisation.
Deindustrialisation is attributed to structural and cyclical factors, including supply-side constraints on energy and transportation, lower industrial demand, and China’s growing manufacturing dominance.
Matters have only been made worse by the US’s latest tariffs in South Africa, with the bulk of locally manufactured goods exported to the US now subject to import tariffs.
The US is South Africa’s third-largest export market for vehicles, with exports reaching R35 billion in 2024.
The latest tariffs are thus expected to reduce South Africa’s competitiveness in the US market, especially as tariffs are far lower for other competitors.
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