Private investors are being asked to sink billions into locomotives, network maintenance and infrastructure upgrades, but Transnet has the ultimate say.
Mining and agriculture have been two of the few bright lights for the South African economy, but with the possibility of declining or at least somewhat lower commodity demand and prices, the country cannot hedge all its future growth on these areas.
The ongoing strike at Transnet has only exacerbated its problems. Poor planning, state capture and corruption had brought Transnet to its knees.
The 12-day strike by some 40,000 Transnet workers may have a lasting and undesirable impact on the country's ports. Most such facilities functioned at between 12 and 30% of daily capacity, with the mining sector losing around R1-billion a day.
Growth prospects have deteriorated across the continent, including for SA.
Despite South Africans’ high dependency on the welfare system, the government seems unable or unwilling to turn the situation around. It now is considering making the temporary, special Social Relief of Distress (SRD) grant more permanent.
Patronage networks will not surrender their access to resources without a long, costly fight.
“On this point, Kganyago said: “Trying to deal with social needs simply through more spending, more debt and higher tax doesn’t really cure the patient, but rather limits the pain while accepting continued decline.“