Seismic shifts in the global economy, while posing many challenges should rather be seen to offer fresh prospects to businesses in South Africa who need to look no further than our own continent for expansion, Deputy Minister of Transport Jeremy Cronin told delegates at the recent Transport Forum in Paarl.
“According to a recent World Bank report, six out of the ten fastest growing economies in the world are in Africa. The centres of economic dynamism have shifted from the developed economies of the USA and Europe to emerging countries, especially the BRICSA bloc of which SA is now a proud member,” said Cronin.
He said local emphasis must be toward beneficiation as South Africa needs to change the trend of “exporting our dirt and importing cell phones”. This is the result of the influence of finance and services on our economy while manufacturing, a key driver of employment, has been allowed to stagnate.
60% of the European Union’s trade is internal, and in the USA and Canada it is 40%. Sadly, in the SADC countries domestic trade accounts for only 10%, said Cronin
Meanwhile, South Africa’s logistics costs are 15% of our GDP, compared with 8% in the USA, Dr Jan Havenga, Head of The Centre for Supply Chain Management, told delegates.
Havenga attributes this to South Africa’s geography and historical lack of infrastructure spend, which has left the country with only 7 500 kilometres of rail network compared with 750 000 kilometres of road network.
“This has a big impact on our economy. The cost of logistics in SA is high as a result of this modal imbalance and should enjoy the continued attention of our economic development planners.”
He added that South Africa’s risks are inordinately high in relation to our dependence on imported fuel and the high impact of road freight on the environment. We are also still an immature economy when measured against the global benchmarks of the economic cycle:
– Extract by farming or mining.
– Move to beneficiate or export.
– Intermediate and/or manufacture.
– Final manufacturing.
– Consumption.
South Africa’s challenge is toward co-modality and all the countries in the SADC region must work together to develop rail-centric networks, added Abrie de Swardt, Marketing Director at IMPERIAL Logistics.
“In South Africa the cost of logistics is far too high, brand SA is not competitive in international terms. At any given moment there are over 1 000 heavy-duty trucks on our roads. The environmental cost of this imbalance will become too high,” said de Swardt.
He said that as much road transport as possible must be switched to rail, citing commodities and containers as ideally suited for railage.
“Consumers cast their votes on the shelves and will buy what suit their values. And more and more people are in favour of protecting the environment”.
Abrie de Swardt will be presenting at the upcoming SMARTPROCUREMENT WORLD CONFERENCE & EXPO, on 11 to 13 October at Gallagher Convention Centre in Midrand, Gauteng. He will be discussing the innovative solutions and tools employed by logistics providers to contain costs from the perspective of procurement and supply management professionals.
To register e-mail: admin@smartprocurement.co.za
