Why do you think this novel was banned by the South African government?

The novel was banned because it represents a savage indictment of South Africa under apartheid. This was a policy which established the clear separation of the races, and ensured that the country's white minority remained fully in charge, both politically and economically. A Dry White Season is a challenge to apartheid, and as the action of the book makes clear, South Africa at that time was not prepared to tolerate any opposition to the state's racial policy.
What was particularly dangerous about the book from the authorities' point of view was that the protagonist of the story, Ben Du Toit, is a white man, a member of South Africa's racial elite. If opposition to apartheid were restricted simply to the country's black majority, then the government could more effectively contain it. However, white opponents of apartheid such as Ben Du Toit were considered even more dangerous by the authorities, because once the system of white domination started to be undermined from within the racial elite, then it would only be a matter of time before it collapsed completely. The character of Ben Du Toit could not be allowed to serve as some kind of heroic example for other white South Africans to follow. As far as the authorities were concerned, then, it was imperative for the book to be banned.