SOUTH AFRICA’s G20 Presidency provides the host country with numerous diplomatic, economic, and cultural opportunities. With a main summit (22-23 November in Johannesburg) preceded by numerous side conferences and engagements focused on a range of areas and sectors, South Africa’s G20 Presidency offers multiple chances to make a positive impact on international diplomatic and business counterparts.
While it remains uncertain whether ArcelorMittal SA (Amsa) will receive a R1bn bailout, the domestic steel industry faces mounting challenges. If Amsa shuts down permanently it is unlikely that Transnet Port Terminals (TPT) can compensate for the loss of locally produced long steel with an immediate increase in break-bulk steel imports.
Another proposed bailout for Transnet is unlikely to fix its fundamental operational and management problems, and will undermine hard-won government fiscal credibility.
Dilution of property rights amounts to a spectacular own goal
In addition to the new trade review instructions implemented by Trump, the bipartisan US-SA Bilateral Review Act could be revived
With load-shedding seemingly a thing of the very recent past (load-limiting remains in place, and load-shedding could return when Eskom takes more of the coal fleet offline for maintenance), the major binding constraint on South Africa’s growth potential is the consistently awful performance of the country’s ports and railways.
Of all the vertically and horizontally integrated freight and ports companies that have existed in the world, Transnet is the last remaining of its kind. While there have been talks and nominal moves towards breaking up at least parts of Transnet’s various operations and introducing private sector investment and competition, these have not yet been made a reality.
Should US president-elect Donald Trump’s new administration succeed in implementing a raft of higher tariffs on imports, and generally place the US on a more protectionist trade and economic footing, developing economies such as SA will need to weather higher prices, more restricted and hobbled global trade flows, and the effects of a stronger dollar.