Duncan Wanblad, CEO of the multinational mining company Anglo American, struck a chord when he spoke about SA’s “extraordinary untapped potential” at the Joburg Indaba last week.
He was referring to the billions of rand in output SA was forgoing in the mining sector because of the challenging business environment.
The same broadly applies, of course, to other industries, all of which have seen their costs escalate and output decline either because of load-shedding, inefficient and failing rail services, the collapse of water infrastructure, crumbling roads, or any combination of these.
Some estimates put the economic cost of inefficiencies at Transnet at about R1bn per day and according to central bank estimates the electricity crisis is costing the economy as much as R900m per day. This means these two crises alone could be costing SA R700bn this year.
Poignantly, Wanblad remarked, even greater losses to the economy might be obscured by the fact that we don’t even know what opportunities the country is losing out on because it is just not seen as a very attractive and secure investment destination.
As he put it: “We will never know the amount of investment that companies within and outside SA are choosing not to make in SA as a result of our very real challenges.”
What we do know is that apart from 2021 (when the economy recovered from the deep Covid-19 slump) SA has not experienced real GDP growth of more than 2% since 2013 — far below the 5% to 6% needed to reduce the backlog of unemployment and poverty.
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