Business
South Africa Upgrades Port, Rail Infrastructure To Boost Exports
The seaports and rail system of South Africa play an important role in the economies of not only that country, but those of neighboring landlocked members of the Southern African Development Community’s 15 member states. But world trade and shipping patterns are shifting.
Growing trade with the Far East, as well as South Africa’s inclusion in the Brazil, Russia, India, China, South Africa (BRICS) trade bloc, has increased traffic through the ports. Add to that ever-larger container vessels that require larger, more efficient port facilities and South Africa was faced with finding appropriate response or face bottlenecks.
The solution: upgrade and expand their seven ports and connecting rail infrastructure to state-of-the-art facilities. The timing for the expansion is essential to keep up with increased traffic through the countries important sea ports and inland to landlocked countries – something especially important to the economic impact of South Africa’s exports.
“Greater export competitiveness and deeper regional integration could help propel South Africa towards faster-growing exports, allowing it to achieve higher, more inclusive, job-intensive growth as laid out in the country’s National Development Plan (NDP) 2030,” according to World Bank’s South Africa Economic Update released Feb 4.
That World Bank report assesses South Africa’s global economic prospects with a special focus on export competitiveness, with some suggestions of their own. According to the World Bank, the port/rail expansion will help improve export performance to meet South Africa’s targets.
“Yes, it will help, but power and Information and communications technology (ICT) are also issues that, if addressed along side, would magnify the impact,” World Bank Lead Economist and co-author of the report, Catriona Purfield told AFKInsider. The United States is particularly interested in the infrastructure expansion to support exports. Since 2000, the “Africa Growth and Opportunity Act,” or AGOA, has allowed African countries to export duty free to the United States and President Obama has publicly supported renewal of AGOA after it expires in 2015.
“In 2012, South Africa exported $2.1 billion to the United States under AGOA. Many industries, including several automobile manufacturers, have told us AGOA was critical to their decision to invest in South Africa,” US Ambassador Patrick H. Gaspard told an audience at the University of South Africa in Pretoria on February 20.
“South Africa exports more manufactured products to the United States under AGOA than any other country. In 2012, South Africa’s largest exports to the United States were the 60,000 cars made by companies like BMW and Mercedes, along with $70 million dollars’ worth of South African wine. Overall, Americans bought $250 million in South African agricultural products last year, an historic high.”
