http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.15Change: 0.03
R/$ = 10.53Change: 0.00
Au 1305.02 $/ozChange: 6.14
Pt 1486.50 $/ozChange: 13.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
May 18, 2012

SA infrastructure plan is only industry-reviving game in town

Back
Pan-African Research and Investment Services economist Dr Iraj Abedian on the negative effect of municipal inefficiency on business. Camera Work: Nicholas Boyd. Editing: Darlene Creamer. Recorded: 18.5.2012
Johannesburg|Africa|Development Bank Of Southern Africa|Generators|Africa|South Africa|Bank|Manufacturing Enterprises|Manufacturing Sector|Manufacturing Value|Infrastructure|Iraj Abedian|Pravin Gordhan
|Africa|Generators|Africa|||Infrastructure|
johannesburg|africa-company|development-bank-of-southern-africa|generators|africa|south-africa|bank|manufacturing-enterprises|manufacturing-sector|manufacturing-value|infrastructure|iraj-abedian|pravin-gordhan
© Reuse this



South Africa’s multibillion–rand national infrastructure plan offered the only realistic short-term hope of reviving South Africa’s ailing manufacturing sector, which was unlikely to receive any relief from the troubled global economy for at least the coming three quarters. But Pan-African Research and Investment Services economist Dr Iraj Abedian said it was critical that implementation be visibly accelerated, or there was a real risk that the positive sentiments associated with the plan could be reversed.

Speaking at the release of the Manufacturing Circle’s first quarter 2012 Manufacturing Survey, Abedian said the infrastructure plan had the potential to inject life into the economy and pave the way for subsequent growth and development.

“But it is one thing to say, and create [positive] sentiment and expectation [around infrastructure]. It’s another thing not to do, which tends to reverse expectations and place question marks in front of the effectiveness of the plans.”

The survey, which is compiled using information garnered from 49 CEOs representing manufacturing enterprises with yearly turnovers of between R300-million and R10-billion, expected manufacturing value added is to shrink by about 0.7% during 2012. However, confidence levels were stable, which was attributed primarily to the anticipated workflow arising from the public infrastructure drive.

“The speed at which this moves is absolutely critical [especially for manufacturing].”

Speaking in Parliament, Finance Minister Pravin Gordhan said the Development Bank of Southern Africa’s new corporate plan had a “sharp focus on supporting implementation of national and regional infrastructure investment plans”.

“The bank has established firm partnerships with several national departments and continues to strengthen its role in provincial and municipal infrastructure development,” the Minister said.

Gordhan also noted progress being made by the Presidential Infrastructure Coordinating Commission and reported that the National Treasury had stepped up its capacity to assess and support major infrastructure programmes.

But he also noted that output growth in the first quarter had been slower than was forecast and described manufacturing production as disappointing.

Manufacturing Circle reported that production in the period grew by 1.9% quarter-on-quarter, but the value of domestic and international sales deteriorated.

The sector lost 64 000 jobs in the quarter, making manufacturing the second-largest shedder of jobs during the quarter. A total of 35% of the firms surveyed reported job losses during the three-month period, compared with 27% in the previous quarter. The immediate hiring outlook was also negative.

MUNICIPAL DRAG

Respondents also highlighted the poor performance of municipalities as a key concern and a business inhibitor.

“Municipalities have become, increasingly, a source of instability and are undermining the economy,” Abedian argued, adding that in some instances poor local government service delivery had even led to the closure of small firms.

This negative effect arose as much from the surge in rates and taxes over the past five years, as to delays in the issuance of permits. He said municipal rates and taxes paid by his own consultancy, which is located in Johannesburg, had risen by 900% since 2008.

Lack of stable service delivery was also imposing costs, with many small businesses having to consider, for instance, the installation of back-up generators.

Some of the firms surveyed, however, also reported a tendency among large municipalities to replace local products with imports, which was undermining their business.

“The bulk of our economy, if not all of it, is under municipal governance. To the extent that municipalities are not improving despite their intentions and plans [to do so], is a cost to business,” he concluded.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
Other Economy News
The head of economics and trade at the Delegation of the European Union (EU) in Pretoria has acknowledged South Africa’s trade negotiators won important concessions in the long-running Economic Partnership Agreement (EPA) trade talks. But he says it was South...
Article contains comments
ADAM HABIB University of Witwatersrand vice-chancellor and principal Adam Habib
The first of a series of 15 public debates exploring options for the implementation of the National Development Plan (NDP) was officially inaugurated at the University of the Witwatersrand (Wits) School of Governance this week. In association with the Oliver and...
A unit of the World Bank has lent Kenya $50-million at zero interest to support the government's efforts in building capacity to manage the emerging oil and gas industry. Oil discoveries in Kenya are part of a string of hydrocarbon finds in the east African region...
More
 
 
Latest News
Updated 1 minute ago Delta International has embarked on a programme that would see the recently reversed-listed property fund potentially acquire $250-million of assets across Africa. The Africa-focused group raised more than $87-million through a private placement to kick-start its...
Updated 2 hours 19 minutes ago State-owned freight logistics group Transnet has awarded integrated solutions provider Tenova Mining & Minerals South Africa a contract for the supply of three reverse-pulse bagfilters. Two of the filters would be installed on multiproduct rail tipplers and one on a...
Updated 2 hours 22 minutes ago Liquidators have now been appointed to wrap up the liquidation of financially distressed civil engineering group Protech Khuthele Holdings. Theodor Wilhelm van den Heever, Mark Abraham Christian, Irene Susan Ponnen and Mohamed Ismail Patel have been appointed to...
More
 
 
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
 
 
 
 
 
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
GARYN RAPSON Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will open the door for court battles to determine who will be held liable for the remediation
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks