Industrialisation and the provision of infrastructure will accelerate Africa’s economic growth, says State-owned logistics provider Transnet CEO Siyabonga Gama.
Speaking at the International Heavy Haul Association (IHHA) Conference promotion breakfast, in Johannesburg, on Monday, he highlighted that members of the IHHA and the heavy haul industry had a significant role to play in ensuring that respective countries drove their economies forward.
“We do play a pivotal role by promoting and investing in industrialisation,” he said, suggesting that “the renaissance in rail”, which he believed was taking place across the continent, could create greater economic growth and stability, but was also critical in terms of infrastructure development.
Gama underscored the imperative of dealing with the infrastructure backlog, noting that the infrastructure deficit in Africa amounted to more than R100-billion a year, and had been growing by 2%.
“We have a combination of years of delinquent underinvestment in infrastructure, not only in Africa, not only in our roads and rail, but also at our ports, so we are not able to repatriate raw materials from production areas, to markets in the manner in which we could,” he lamented.
“We need to make sure that Africa’s share of global trade continues to grow, as it [remains] miniscule on a continent that has [a population of] more than one-billion people,” he said, noting that Africa’s intra-trade stood at about 17%, compared with intra-trade on the American continent of 60% and intracontinental trade of up to 40% in Europe and Asia.
“[Further,] industrialisation has actually been declining in real terms over the past decade [in Africa], which means we need to catch up on the investment and accelerate on that,” he said.
He cited the PricewaterhouseCoopers ‘Gearing Up’ report, which pointed to some weak policy sectors, such as transport, which were holding back investment in African countries.
Key to the industrialisation and acceleration of economic growth, also through the provision of infrastructure, was the need for private sector involvement and collaboration, Gama said.
“We must look at what is the best way . . . to attract the private sector to crowd in . . . investment into the . . . different infrastructure projects that we might have,” he said.
Gama added that, as South Africa as a country tries to modernise its infrastructure, Transnet was also embarking on a journey of significant and pervasive research and development, which would be at the epicentre of the company's business.
“We are [investigating how to] position this company from a digital perspective,” he stated.
He further suggested that Transnet was “ideally placed to take advantage of the changes taking place on the continent and the rest of the world, particularly in areas where it can extend its remit to incorporate other value-add services in the entire logistics supply chain."
“Industrialisation is key in terms of that, but also, we believe that our success in the Market Demand Strategy is a testament to the strong and agile manner in which we are navigating tough macroeconomic challenges,” he added.