All eyes on South Africa in 2025
In 2024 South Africa celebrated 30 years of democracy and the first coalition government. It was also an eventful year for the LAN team in Pretoria: a unique youth cooperation took place between NAJK and young South Africans looking to start their own agricultural youth organisation, we hosted key players of the Grootvlei Just Energy Transtion in the Netherlands and our new Agricultural Attaché joined the team.
2025 is set to look no less exciting as South Africa hosts the G20. The LAN team will continue supporting Dutch-SA partnerships through ongoing projects such as Kruger2Canyons and Grootvlei JET. The team is also ready to facilitate queries from Dutch companies interested in doing business in South Africa. In this article we explore South Africa’s business environment in 2025, the country’s international role and a general outlook for agriculture in the coming year.
Doing business in SA
On the business front, South Africa continues to become an increasingly attractive destination to do business. This month, the country achieved an energy security milestone, celebrating 300 days of no loadshedding (planned power cuts). South Africa previously introduced loadshedding as a means to protect the grid when energy supply could not meet demand, which reached peak levels in 2023. However, the country has stabilized the grid and continues to explore alternative, green energy sources to power the economy. This means companies needing reliable and increasingly green energy options to power their business can look to South Africa as a suitable destination.
The positive effects of the new government on the logistics sector is also beginning to bear fruits. In the past years, South Africa has struggled with logistical bottlenecks. This includes a dilapidated rail network and frequent delays at harbours. However, national logistics company Transnet has been pushing ahead with ambitious plans to overcome these challenges by exploring new initiatives that open the door for private sector cooperation on rail and ports. This year, Transnet is readying itself as the plans move into implementation phase.
In 2025, South Africa will celebrate one year of the government of national unity (GNU), the country’s first coalition government. While South Africa has proven politically stable since its transition to a democracy 30 years ago, this latest development signals the political maturity of the country’s democracy. Again, this makes the country an attractive place to do business, which is also reflected in Dutch Foreign Direct Investment (FDI) into South Africa. The Netherlands has the highest FDI in South Africa of any country, contributing 37% of total FDI, and 68% of EU FDI into South Africa. This demonstrates that there is already an established community of Dutch businesses and professionals who are making the most of the business and investment opportunities available.
South Africa's G20 presidency
This year all eyes will be on South Africa as it hosts the G20, the first time it is hosted in Africa. Although the Netherlands is represented in the G20 via the EU, South Africa invited the Netherlands to fully participate in 2025 as a guest country. This invitation is a display of South Africa’s trust and openness to working with the Dutch and provides a unique opportunity for us to think along with our South African partners on discussions. Discussions will cover acceleration of the Just Energy Transition and food security and for the G20 agricultural working group, discussions will include inclusive market participation, empowering women and youth, fostering innovation and building climate resilience. These topics reflect priorities in much of our existing work in the country.
Agricultural outlook
Looking towards agricultural developments, La Niña – although late – brought significant summer rainfall to central and northern regions of the country over late December and early January. However, the hot and dry conditions have returned very quickly since, which highlights an increasing trend of more intense, extreme and unpredictable weather patterns. South African farmers looking to create more predictability amongst these changes and to protect crops from thunderstorms are increasingly adopting undercover/protected farming practices, particularly in horticulture. More farmers are also exploring ways to optimize their water management. These kinds of developments create new business and employment opportunities in South Africa and fits into South Africa's priority of producing sufficient, affordable food in a climate-smart way, with decent jobs. According to leading economist. Wandile Sihlobo, horticulture is one of the main subsectors that is proving to have a positive impact on the job market.
Regenerative farming is also gaining traction in South Africa as farmers seek ways to adapt to longer dry spells. In the Western Cape province, more than 50% of farmers are already practicing regen in one form or another. These kinds of developments further open the door for partnerships with Dutch organisations who are willing to collaborate with South African partners on climate-smart solutions.
In conclusion
Despite unpredictable weather, the South African business climate is looking increasingly predictable for doing business. With improved electricity supply and logistical infrastructure, the essential infrastructure is here. These developments come at a very appropriate time as all eyes are now on South Africa for its G20 presidency. These conditions provide opportunities for Dutch organizations to support South African farmers tackle climate challenges and to manage their water and inputs more efficiently.