As the economic woes for South Africa continue to pile up and the situation for consumers growing dire day by day, President Cyril Ramaphosa said a plan had been put in place to deal with the logistical issues that the country is facing.
This comes after a number of proposals were put forward to the president to improve road, rail and ports infrastructure.
Ramaphosa said the government would consider them and announce a set of measures in the coming weeks.
The proposals were made to Ramaphosa during a virtual meeting last Wednesday, where the president interacted with chief executives from exporting economic sectors, such as mining and minerals, the agricultural and forestry sectors, and the automotive and freight forwarding industry.
“We need to take urgent measures to resolve the logistics backlog that continues to undermine economic growth. I deeply appreciate the constructive manner in which all the impacted sectors have approached the resolution of this crisis,” Ramaphosa said.
The president had met with the Transnet board and executive management at the Union Buildings in Pretoria last month.
Private companies, including mining giant Anglo American Plc and other mineral exporters, said they had lost billions of rand in potential export revenue due to Transnet's poor performance. They have called for public-private partnerships with Transnet to fix the logistics problems.
Transnet hauled 173 million tonnes of cargo in the financial year that ended March 2022, down from 183 million tonnes the previous year, the worst performance in a decade.
Ramaphosa committed the government to consider some of the proposals presented and act on them quickly to unlock much-needed investment into the economy.
Fixing the country’s logistical issues, however, will not come cheap.
Back in 2018, Ramaphosa announced an ambitious plan of raising R1.2 trillion worth of investments in the economy over a five-year period at the South Africa Investment Conference (SAIC).
Since then, the country has gone through the Covid-19 pandemic, the Russia-Ukraine conflict, see-sawing fuel prices, civil unrest, and the worst energy crisis in South Africa in history as the state-owned power utility continues to impose rolling black-outs as it struggles to meet generation supply due to break downs and other operational challenges.
This year’s SAIC will mark the fifth leg of Ramaphosa’s R1.2 trillion investment drive after the government said it had already raised R1.14 trillion.
The SAIC attracts delegates spread across South Africa and the rest of the globe.
Last year, the fourth SAIC raised R367 billion in investment commitments, bringing the five-year investment target firmly into sight.
Slated to take place on 13 April this year, it is likely that Ramaphosa’s target will be met, which is an achievement in itself as raising this amount given the harsh economic environment, with inflation on the up and an unstable energy supply.
Of the 152 investment announcements made previously, 45 projects have already been completed, while a further 57 projects are currently under construction.
These investments have resulted in new factories, call centres, solar power plants, undersea fibre optic cables, expansion of production lines, and the adoption of new technologies.
“Importantly, the new investments also significantly contribute to our national goals of socio-economic development as we create sustainable jobs, reduce poverty and drive back inequality. These investments have also contributed to a substantial increase in local production and encouraged efforts to buy local.
The 2023 SAIC takes place as the country deals with a constrained energy supply that has resulted in persistent load shedding. In response to our energy challenges, government, through the Energy Action Plan, has announced several interventions to turn around the situation,” a statement from SAIC reads.
Professor Bonke Dumisa, an independent economic analyst, said that Ramaphosa will be setting a further investment target of R2 trillion for the next five years up to 2028 for his second term presidency.
“There are many sceptical people who doubt the figures given by the Presidency, citing mainly the issue of continued unemployment as a reason why they doubt whether there has been so much investment in the past five years. I don’t blame those sceptics for being doubting Thomases, but the reality is that the R1.2 trillion investment target was achieved,” Dumisa said.
“There is a desperate need for South Africans to fully understand why businesses invest. Businesses will not invest where they are not guaranteed that they will be able to peacefully operate. It is clear that most businesses that were targeted, looted and destroyed during the July 2021 criminal economic sabotage were businesses in geographic areas where they had more possibilities for future growth and had more capacity for creating more jobs. Paradoxically, these were the businesses that were more severely targeted and destroyed, and most of them have barely been restored to their previous condition,” Dumisa further said.
On Wednesday last week, the Department of Trade, Industry and Competition hosted a breakfast session as the country geared up for the latest instalment of the SAIC.
The breakfast session provided an opportunity for business community investors and SAIC sponsors to reflect on the success achieved in the government's investment mobilisation thus far, including challenges hindering economic growth.
The Minister of Trade, Industry and Competition, Ebrahim Patel, addressed members present who were at the breakfast.
BUSINESS REPORT