Growth in the transport and storage sector typically mirrors the performance of the broader economy. In line with the current sub-trend growth environment, FNB forecasts the sector to grow by 2% in 2014 and just under 3% in 2015. Transport, including good roads is an important catalyst in the social and economic development of any country. According to Jason Muscat, Senior Industry Analyst, at FNB Economics, transport systems and infrastructure are the lifeblood of any economy.

As mentioned by President Jacob Zuma during his State of the Nation address this week, the South African government has invested about one trillion Rand in new infrastructure to provide water, energy, transport, sanitation, schools and clinics to its citizens. Over the next three years, the government will spend R847 billion on infrastructure and other projects. “We believe that this significant investment is certainly a step in the right direction and will have many positive spinoffs,” says Muscat. “The transport sector is an unfortunate casualty of broader economic constraints. For the transport sector to grow at a faster pace, we need the agricultural, mining and manufacturing sectors to ramp up production and exports. The planned construction will create jobs within many sectors of the economy, which means more people will have an income and be able to spend. That, we hope, is the beginning of a virtuous circle, wherein we generate faster economic growth, helping to alleviate poverty and unemployment. As far as the transport sector is concerned, the planned investment will likely bring down the cost of transportation and help drive efficiencies, ultimately making goods cheaper,” adds Muscat.

In 2013, the transport, storage and communications sector grew by less than 2%, which was largely a function of a broader slowdown. It still makes up a substantial portion of the economy though - roughly 10% or R250bn. The actual contribution is much larger since there are many service related industries which operate closely with the transport sector, industries like, tourism, travel agents, freight forwarders, etc. The transport sector really is the critical link in the chain. “Costs are rising at a time when demand remains frail. A weak Rand has driven up the price of fuels and new vehicles, and will likely constrain more robust capital investment. Deteriorating road infrastructure and increasing congestion add further to operating cost considerations, and that the country is so dependent on road freight makes it vulnerable to transport cost increases. e-Tolls are already adding to the cost burden of inland operators and expansion of the project to other provinces cannot be ruled out,” adds Muscat.

The upcoming Southern African Transport Conference, scheduled to take place at the CSIR International Convention Centre in Pretoria from 7-10 July 2014, will explore themes relating to transport and the economy with papers presented which look at some of our most pressing issues such as Dr M Mitchell’s paper titled: A policy analysis study as input into the effective implementation of facets of the national development plan. The paper examines how to a large extent South Africa has based its future social and economic development to 2030 on the National Development Plan , of which all facets of transport form an important element.  Whilst the plan, based on government’s overall economic and development policy represents the best views of its compilers as to what will work, “it is an essential part of the policy and planning process that its policies be tested and (if necessary) changed in the light of evidence” gathered during the implementation phase of the plan (Theobald, 2013).