The government has reiterated that it was taking bold steps in a bid to reinvigorate the logistics sector and make it an enabler of sustainable economic prosperity.
This comes as the World Bank Group asserted that by delivering high-quality and affordable infrastructure services, South Africa can reduce existing constraints on businesses and increase households’ disposable income.
Transport Minister Barbara Creecy on Friday admitted that South Africa’s logistics sector has not been operating optimally, which has had negative implications for the country’s economy, despite competitive advantage as the logistics hub of the subcontinent.
Creecy said the rejuvenation of the rail sector was a key objective of this administration in order to achieve the target of moving 250 million tonnes of freight on rail by 2030.
“The Rail Policy introduces structural reforms in the sector that are intended to enable private sector investment, optimal utilisation of the rail network and effective economic regulation of rail that will facilitate equitable access to the rail network and ensure that it is properly managed,” Creecy said.
“As part of this process a Private Sector Participation (PSP) unit is being established by the Department in collaboration with the Development Bank of Southern Africa. Once established, this unit will help direct and coordinate private sector investments in priority rail projects requiring capital investment.
“The Department is also in the process of issuing Requests for Information (RFIs) regarding potential investment in the rail and port sector. This serves to share information with the public regarding possible private sector participation projects, but also to allow the Department, and by extension Transnet, to gather information on projects with the potential for third party involvement.”
Creecy emphasised that throughout this process all rail and port infrastructure will remain under the government’s ownership, adding that the department was in the process of consulting with organised labour regarding the details of the freight logistics roadmap.
Last week, Transnet Port Terminals (TPT) said it will take delivery of over 100 pieces of new cargo handling equipment at the Durban Container Terminals (DCT) in 2025 as part of its recovery plan.
A new World Bank report titled “Driving Inclusive Growth in South Africa: Quick Wins with Competitive Markets and Efficient Institutions” and launched on Friday asserted that a robust economic recovery, shared across all sectors of society, can be achieved in the immediate future by implementing a series of policy actions in four priority areas: infrastructure services, greater private sector participation, creating cities as engines of growth, and efficient public spending.
“The report highlighted that targeted policy actions – fostering competitive markets and strengthening institutions – can spur recovery and lay the foundation for sustainable growth and shared prosperity in South Africa,” said Axel van Trotsenburg, senior managing director of the World Bank.
“It is the result of extensive engagement with experts and stakeholders to identify concrete policy options for improving the lives of millions of South Africans. It will also help inform how the World Bank can best support the country through technical assistance and lending programs.”
The bank said that by delivering high-quality and affordable infrastructure services, South Africa can reduce existing constraints on businesses and increase households’ disposable income. It also encourages measures to foster private sector growth to promote innovation and competitiveness, which will enhance job creation.
By making cities engines of inclusive growth, the country can shrink economic distances and provide opportunities for all.
It asserted that by delivering high-quality and affordable infrastructure services, South Africa can reduce existing constraints on businesses and increase households’ disposable income. It also encouraged measures to foster private sector growth to promote innovation and competitiveness, which will enhance job creation
The report also highlighted the need to improve the efficiency of public spending to increase the value for money of government interventions in the economy.
Finance minister Enoch Godongwana said the government has clear evidence of the tangible outcomes of reforms that reduce economic bottlenecks.
“This is best exemplified by the first phase of Operation Vulindlela, which, among its key interventions, was reforms to regulation that deepened competition in sectors like electricity, rail, and telecoms,” Godongwana said.
“The next phase will go even further and aims to accelerate reforms in key network industries. We are delighted to have the benefit of this new report to broaden our approach to inclusive growth.”
BUSINESS REPORT