http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.83Change: -0.12
R/$ = 11.04Change: -0.17
Au 1172.85 $/ozChange: 3.68
Pt 1231.00 $/ozChange: -0.50
 
 
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 Tenders 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|Manufacturing Enterprises|Manufacturing Sector|Manufacturing Value|Products|Service|Services|Infrastructure|Iraj Abedian|Pravin Gordhan
|Africa|Generators|Africa||Manufacturing|Products|Service|Services|Infrastructure|
johannesburg|africa-company|development-bank-of-southern-africa|generators|africa|south-africa|bank|manufacturing|manufacturing-enterprises|manufacturing-sector|manufacturing-value|products|service|services|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 (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
The retail price of 95-grade petrol in South Africa will drop by 45 cents or 3.3 percent a liter from next Wednesday, while wholesale diesel will decrease by 4.9 percent, the government said on Friday. Petrol will cost 13.16 rand ($1.20) a liter while the wholesale...
Special purpose vehicle GreenCape will, by the end of 2014, make an application to the Department of Trade and Industry (DTI), the Western Cape provincial government and the City of Cape Town to declare Atlantis, on the Western seaboard, a special economic zone...
The German government has committed a further R70-million towards the second phase of the Non-Motorised Transport (NMT) programme. The NMT programme forms part of the Department of Environmental Affairs’ 2010 FIFA World Cup National Greening Legacy Programme.
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
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.
 
 
 
 
 
This Week's Magazine
In the next 20 years, it was expected that, in Africa, more people would live in cities and towns than in rural areas, United Nations Habitat executive director Dr Aisa Kirabo Kacyira said at the Human Settlements Indaba that took place earlier this month in...
Tough-talking Human Settlements Minister Lindiwe Sisulu has committed government to building 1.5-million low-cost houses over the next five years, telling the Human Settlements Indaba in Johannesburg on Wednesday that the State would achieve this target through the...
Over the past 20 years there has been persistent concern about deindustrialisation in South Africa, as well as the fact that locally produced manufactured products have been increasingly displaced by imports.
Financial agreement for Ghanian independent power producer (IPP) Cenpower Generation Company’s $900-million, 350 MW combined-cycle gas-turbine power plant was finalised earlier this month, paving the way for the project’s construction to begin before 2015 in Tema,...
The revenue implications for South Africa of ‘base erosion and profit shifting’ by corporate taxpayers are firmly in the crosshairs of the Davis Tax Committee (DTC) and Judge Dennis Davis hinted last week that recommendations were being considered to “detect and...
 
 
 
 
 
 
 
 
 
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