Organised business is considering the establishment of a fund similar to the R100m Resource Mobilisation Fund (RMF) for the implementation of the work of the national logistics crisis committee (NLCC) aimed at improving the performance of SA’s ailing ports and railways.
The NLCC, which was first mooted by President Cyril Ramaphosa in April, would be the equivalent of the national energy crisis committee (Necom), which was established in 2022 to support the implementation of the government’s energy action plan.
The NLCC has seven work streams to co-ordinate approaches between the government and business to tackle challenges in the logistics sector. These workstreams, or focus areas, include the restructuring of Transnet, procurement and financing, improving road transport operations and border transit — with a specific focus on dealing with the bottlenecks on the N4 corridor — and strengthening security at Transnet, according to presidency spokesperson Vincent Magwenya.
Business Leadership SA (BLSA) CEO Busisiwe Mavuso says the NLCC is a collaborative effort between business and the government that will press for the establishment of well-defined interventions to fix SA’s logistics sector, which has been on its knees in recent years partly because of poor management and performance at state-owned rail and ports operator Transnet.
“Business is having to come up with a similar fund like the RMF ... to make sure that we can capacitate the NLCC. This is the commitment that business has already made and we are working on it,” Mavuso said.
“Companies that are exporting and importing goods will tell you how difficult it is to do that through Transnet,” Mavuso said during a webinar hosted by PSG Konsult on Tuesday.
Transnet, which is responsible for transporting crucial minerals from rail to port, is still reeling from years of state capture and corruption under former executives. Its rail network, which covers domestic and regional corridors and is used for the transport of export commodities, remains unreliable, causing harm to companies’ bottom lines and the economy.
To deal with the issues the government has previously announced a road map to outline reform, which is likely to include increased private sector participation in the logistics sector and the establishment of a separate infrastructure manager at Transnet Freight Rail.
BLSA has identified logistics, the persistent energy crisis and crime and corruption as the three largest impediments to much higher investment, growth and job creation.
“For the investor community, the local investing environment has deteriorated to its weakest level and we need to make sure that we improve. The litmus test for the intervention that we are going to make is making sure that we get investment,” she said.
Mavuso said investors who would normally invest in SA have now turned to East Africa as their investment destination of choice.
“We are losing a lot of investment to East Africa and we are no longer the destination of choice when investors are looking on the African continent. The interest in SA, as far as investment is concerned, is that SA gives them a gateway to the African continent, so if capital can’t land in SA, then they [investors] are going to look at another address,” she said.
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