Trade, industry & competition minister Ebrahim Patel says inefficient rail and ports systems curtail the advancement of the black industrialists and hamper businesses that aim to export or have to import raw materials.
Addressing the media on Monday, days before a black industrialists conference later this week, Patel said creating a competitive logistics transport system was important for SA as it lacked an industrial base close to major waterways.
“Our core industrial sectors are not all located on a waterway,” he said. “If you look at industrial development in many parts of the world it’s either on the coastline ... or on a major waterway like a big river,” Patel said.
“In the case of SA, our industrial development was [determined] by the location of minerals, so we have the biggest industrial concentration in the province of Gauteng. Therefore transport logistics is vital to be able to bring in components that are required for our industrialisation and to send products to other parts of the country and the world.”
SA’s largest industrial zones, focused on mining, transport, energy, manufacturing, tourism and agriculture, are scattered across Gauteng, the Western Cape, the Pinetown area in KwaZulu-Natal and the Gqeberha-Kariega area in the Eastern Cape. The coal belt in Mpumalanga accounts for more than 80% of SA’s coal production, which is used in electricity generation and the synthetic fuel industry.
In recent years local businesses have been battling because of poor service delivery by Eskom and Transnet.
The black industrialists programme, which started in 2016, has funded dozens of companies and assisted them with access to markets through link-ups with commercial banks and state-owned entities.
Patel said as the programme had become focused on exports, domestic transport and logistics challenges had to be addressed to create a conducive environment.
“Looking at what we have done over the last number of years with the programme, we have some clear and evident success stories, but those success stories can be increased more, can be more powerful and can be larger in scope if we are able to address actively two challenges,” he said.
“The first challenge is energy availability and security and the second the efficiency of our transport logistics system. It goes from freight rail right through to port management capabilities.”
Preferred port
Subsequently, the Maputo port has become the preferred port for commodity traders as its shipping infrastructure has gained traction due to Transnet inefficiencies. This has resulted in the port handling record-breaking volumes.
The management of Transnet, headed by new group CEO Michelle Phillips, will also be under pressure to turn around the main fruit export port in Cape Town, now ranked as one of the worst-performing ports in the region.
Patel said that the process of rebuilding the state entities, which were decimated during the state capture period, had started, with various partnerships struck with the private sector to enhance the rejuvenation.
The minister said while recent progress was made at the Durban harbour to reduce waiting times in the port and speed up ship movement, more was needed to build a “truly competitive transport system”.
The second black industrialists conference, hosted by the department in partnership with the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF), comes before the 20th anniversary of the Broad-Based Black Empowerment Act of April 2004, aimed at advancing economic transformation and the economic participation of black people in the economy.
Part of the conference will reflect on progress made, while funding opportunities, regulatory support and supplier development funds will be among the topics discussed.
About 2,000 delegates and industrialists are expected to attend in Sandton.
“Those companies that you will see there on the exhibition floor on the marketplace together employ about 8,000 South Africans,” Patel said.
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