The South African government is duty bound to do what benefits the South African people. It should not allow selfish vested interests to stand in the way of the common good.
A government that allows vested interests to profit at the expense of the South African people is as unworthy as the government that aided a vested interest to engage in State capture.
Making sure that exports leave South Africa’s shores benefits the South African people as a whole because those exports bring in foreign exchange that supports the value of the local currency that we all need to keep going.
When it comes to rail, there are few complaints about the coal line and the iron-ore line, but that is not the case with mines using certain general freight rail lines, where poor service is disadvantaging all of us.
When a mine calls for five rail wagons, it should get all five and not only two and be forced to resort to what nobody wants them to do – use roads at a far higher cost.
What is best for the South African people is for these mines to be served efficiently and competitively so that they can maximise the volume of foreign exchange flowing back into the country.
Likewise, a government unable to run its electricity generation assets reliably and competitively should give way to a private sector wanting to fund its own power capacity, and, getting back to rail, failing rail routes should be concessioned.
The mining sector is willing and able to bring in at least 1 500 MW of additional power generation capacity, but it cannot get past the regulatory barriers of new project licensing.
Government is duty bound to remove these barriers for the benefit of the South African people, who should demand that it does so.
The multipage document that the mining industry has delivered to the Treasury must be taken seriously and move faster to curtail expenditure from a fiscal consolidation perspective and to open the way for the private sector to contribute more towards economic growth.
The economy is growing at 0.5% and South Africa’s total productivity factor growth has declined into negative territory at –0.03%, which makes attracting investment difficult.
Productivity, which is the function of competitive markets, ultimately drives investment growth, which, in turn, enables the economy to be productive.
Power load-shedding and faltering logistics have put a brake on all this. South Africa’s private sector has accounted for 70% of net investment in the last 25 years, despite owning only 54% of the total fixed capital stock of the South African economy. By contrast, government, with 41% of the total fixed capital stock of the economy, in the same period accounted for less than 30% of net investment in the economy.
That tells a story and government is duty bound to take that into account when redirecting this economy.