Mthobisi Nozulela|Published
South Africa’s next big economic challenge may come from the weather. A strengthening El Niño is raising concerns about rising temperatures, weaker rainfall and the impact on the country’s farms, food prices and economic growth.
Coface chief Africa economist Aroni Chaudhuri has warned that climate risks are becoming one of Africa’s biggest economic challenges, with extreme weather threatening agricultural production, food security and economic stability.
Climate risks threaten food prices and growth
He said that while favourable rainfall helped boost agricultural production and ease food-price pressures in 2025, a strong El Niño could reverse those gains, with knock-on effects for inflation, consumer spending and economic growth across South Africa and the wider region.
“The region's food system is heavily reliant on stable maize production across countries such as South Africa, Zambia and Zimbabwe. Any significant decline in output has the potential to accelerate food inflation throughout the region, placing additional pressure on households that are already facing constrained budgets,” Chaudhuri said.
“This matters because the impact of food inflation is much stronger in EMDEs, relative to advanced economies.”
The warning comes as South Africa heads into the summer planting season, with climate forecasts pointing to a strengthening El Niño that could affect rainfall and temperatures into early 2027.
But the extent of the economic damage remains uncertain.
Investec said last week that South Africa was likely to experience a less severe impact than during the 2024 drought, when poor rainfall hurt agricultural production and weighed on economic growth.
The bank expects El Niño to subtract between zero and 0.1 percentage points from economic growth in 2026, and no more than 0.2 percentage points in 2027. It has lowered its growth forecast for next year from 1.7% to 1.5%.
"We continue to expect the negative impact on GDP this year from the El Niño will be 0% to -0.1% y/y, and next year not worse than -0.2% y/y, with the El Niño to run until February 2027 followed by a potential weak La Nina on current expectations," the bank said.
Investec warned that above-normal temperatures could still damage crops and livestock, even if South Africa avoids a severe drought. Agriculture was a key driver of growth in 2025, contributing to growth of 1.1%, compared with 0.7% excluding the sector.
Extreme heat puts workers and businesses at risk
The impact could also be felt in workplaces, with extreme heat threatening workers’ health, productivity and business operations.
International SOS has urged South African organisations to prepare for hotter conditions, warning that heat can affect workers indoors and outdoors, disrupt supply chains and put pressure on electricity and transport networks.
Dr Chris van Straten, the organisation’s global health adviser for clinical governance, said extreme heat should be treated as both a workplace health concern and an operational risk.
He warned that heat can cause dehydration and exhaustion, while affecting concentration and reaction times.
“Europe’s recent experience demonstrated how quickly extreme heat can overwhelm healthcare systems, disrupt operations and create serious risks for workers. Although South Africa’s climate differs from Europe’s, the lesson for employers is clear: extreme heat should be recognised as both a workplace health concern and an operational risk,” Dr van Straten said.
International SOS has advised employers to assess their exposure to extreme heat before temperatures rise, monitor weather forecasts and put plans in place to protect workers.
“Many organisations continue to associate heat-related illness primarily with outdoor workforces such as those in construction and agriculture,” he added.
“However, employees working indoors in warehouses, factories and poorly ventilated offices can also be vulnerable, including those required to wear heavy personal protective equipment (PPE).”
IOL BUSINESS