EDITORIAL: Efforts to fix logistics network welcome

The Reserve Bank has estimated that this year’s worst-yet load-shedding will slash two percentage points from the economic growth rate. In other words, we could have grown by a reasonably robust 2% in 2023 instead of close to zero.

Add to this the cost of our catastrophic rail system and underperforming ports and the lost opportunity is even larger.

The Minerals Council believes SA’s energy and logistics woes take as much as three percentage points off the economic growth rate. The value of mining exports rose in 2022 thanks to high prices, but volumes declined by 40%.

Exports of bulk commodities such as coal, iron ore, chrome and manganese that rely on rail were R50bn below target, but the council estimates the real cost was closer to R150bn. It is hardly surprising the mining industry, which accounts for 80% of Transnet Freight Rail’s business and 50% of its business overall, has been in crisis mode and shouting ever louder. Now at last the Transnet board is working with the industry.

The government has belatedly turned its attention to Transnet in recent months and is finally trying to fix its operations and push  for accelerated private participation. President Ramaphosa’s newly established national logistics crisis committee is leading the charge.

Hopefully efforts to fix the logistics network will not take as long as the president’s efforts to fix electricity.