Transport is not just a sector in SA’s economy; it is the backbone that holds together trade, industrial activity, labour mobility and the daily functioning of society. When transport collapses, the economy stalls and the ripple effects are devastating. Yet, despite its strategic importance, transport in SA has become a drag on growth, a burden on public finances and a brake on competitiveness. As we mark Transport Month, we must confront uncomfortable truths and rethink how this sector can become a growth engine rather than a recurring crisis.
The numbers reveal the scale of both the opportunity and the crisis. Transport, storage and communication contributed 8.2% to SA’s GDP in 2023, approximately R440bn, making it one of the top five contributors to the economy. But beneath that headline, the sector is buckling. In the second quarter of 2024, it contracted 2.2%, shaving 0.2 percentage points off overall GDP. Transnet’s freight rail volumes, once exceeding 220-million tonnes a year, plunged to about 152-million tonnes in 2023/24, a collapse of more than 30%. The World Bank ranks SA’s port efficiency among the lowest globally, with Durban ranked 344th out of 348 ports in 2023. These inefficiencies add an estimated R150bn a year in lost trade, demurrage costs and missed export opportunities.
The overreliance on road freight, which carries nearly 80% of all goods, further exposes the economy. Road-based logistics costs are 15% higher than the global average and push up the cost of doing business, while road maintenance now costs the state an estimated R35bn a year. The Road Accident Fund (RAF), another symptom of systemic dysfunction, is running a deficit of over R300bn, with payouts growing faster than revenues. This is a financial time bomb for the fiscus and a risk to road safety accountability. Meanwhile, a rail system that could move bulk cargo more efficiently is decaying, costing the mining sector an estimated R50bn annually in lost export revenue due to logistics bottlenecks.
SOEs shadows of former selves
State-owned enterprises (SOEs) are at the heart of this crisis. Transnet, the cornerstone of the logistics network, is burdened by operational inefficiency, theft, corruption and a maintenance backlog running into billions. Its failure has directly reduced mining output, undermined manufacturing exports and pushed exporters to rely on more expensive private logistics. The Treasury has been forced to issue multi-billion rand guarantees to keep Transnet afloat, and the company recently secured a $1bn loan from the African Development Bank to stabilise operations. Without deep governance reform, these interventions are temporary fixes rather than solutions.
Prasa and Metrorail, once vital for urban mobility, are shadows of their former selves. Infrastructure vandalism, rolling stock shortages and poor management mean passenger rail usage has collapsed by more than 80% over the past decade. Millions of workers now depend on minibus taxis or buses, often at higher cost and with greater risk. Frequent strikes, arson attacks such as those that destroyed public transportation, and escalating violence have disrupted transport for hundreds of thousands of commuters. These disruptions cost the economy billions in lost productivity and deepen inequality by limiting access to jobs and services. Urban congestion, driven by inadequate public transport and poor spatial planning, costs Johannesburg and Cape Town an estimated R25bn annually in lost productivity.
The crisis extends to aviation and maritime transport. SAA, once a continental leader, remains fragile after repeated bailouts exceeding R50bn, failed privatisation attempts and unresolved governance issues. Its uncertain future affects connectivity, trade and tourism, sectors that collectively contribute over 9% to GDP and employ more than 1.5-million people. At our ports, inefficiency and infrastructure neglect mean that container dwell times are up to three times longer than global benchmarks, with vessels waiting an average of 10-12 days to dock. These delays ripple through the economy, inflating costs, reducing competitiveness and discouraging investment.
The financial and structural consequences of these failures are profound. Logistics inefficiencies add an estimated 11%-14% to the total cost of goods in SA, compared to a global average of about 8%. Every 1% increase in logistics efficiency could add 0.3% to GDP, a gain worth billions. A shift of even 20% of freight from road back to rail could save R15bn a year in logistics costs and reduce carbon emissions by nearly 10%. Digitalising port and customs systems could reduce dwell times by up to 40%, unlocking an additional R50bn in trade annually.
Integrated transport systems
Policy responses must therefore be bold, systemic and metrics-driven. Public investment alone is insufficient given fiscal constraints. The state must embrace a blended model that brings in private capital and operational expertise under strict regulatory oversight. Freight rail corridors should be concessioned to private operators under performance-based contracts, with the government retaining strategic control but shifting operational risk. Transparent public-private partnerships at ports, such as those already piloted in Durban and Ngqura, can unlock billions in investment, introduce modern technology and improve efficiency.
Urban mobility must also be treated as an economic driver rather than a social service. Integrated transport systems linking rail, bus, taxi and non-motorised modes can cut commute times by 30%, increasing labour participation and productivity. Policy incentives must push freight to rail where viable, penalise overloading and road damage, and align fuel levies and road user charges with infrastructure wear and tear. Digital transformation, including real-time freight tracking, interoperable ticketing and one-stop customs platforms, can cut logistics costs by up to 20%.
Critics argue that increased private participation risks commodifying public goods or pricing out the poor. That risk is real, but continued inefficiency hurts the poor most. With the right governance framework, including social clauses, wage protections and community reinvestment obligations, public-private models can expand access, not restrict it. Efficiency itself is a pro-poor policy because every rand saved on logistics is a rand that can be redirected to social spending, infrastructure or job creation.
Transport Month must be a moment of accountability, not mere celebration. The government should publish a State of Transport scorecard with metrics such as port dwell times, rail freight tonnages, road fatalities, public transport usage and investment inflows. SOE executives must be held to performance targets tied to these outcomes. Above all, the political will to reform must overcome entrenched interests, bureaucratic inertia and the comfort of mediocrity.
Transport is not just another sector; it is the platform upon which industrialisation, trade, tourism and inclusive growth rest. Fixing it could add hundreds of billions to GDP, lower the cost of doing business and create hundreds of thousands of jobs. Failing to do so will condemn SA to slow growth, persistent inequality and eroding competitiveness. The choice is not technical; it is existential. The economy cannot move forward if its transport system cannot.
• Dr Malapane is CEO of the Market Intelligence Barometer.
