MK Party’s KZN control is an investment headache with logistics in the balance
|Published
By Donald MacKay
One hundred and twenty-one billion rand: that’s the amount of money KwaZulu-Natal has been allocated in this year’s budget.
It rises to R126bn next year and to R132bn the following year. That money will be handed to former president Jacob Zuma’s MK Party and whoever they coalesce with in KZN if a sensible national coalition is not formed. A very deep trough for some very large snouts.
In 2023, R312bn was exported through Durban port and another R213bn was exported through Richards Bay. Both of these numbers are far, far lower than they should be because, well, the ports are broken.
The more interesting statistic are the exports of R143bn through Komatipoort, the road border post into Mozambique, up 160% from 2019. By comparison, the exports through Durban rose 60% and Richards Bay, 53% over the same period. The biggest winner of our collapsing infrastructure it seems is Grindrod, DP World, and Mozambique Gestores, the companies who manage the Maputo port.
And R1 trillion was imported though Durban port, a large part of which is headed to Gauteng, so don’t for a moment think the impact of the collapsing ports is restricted to KZN.
The most important highway in the country, the N3, is almost all in KZN, so a stable government in KZN (lol) is more important than ever. A lot has to happen in that province, with implications for the whole country, as we’ve discovered when Transnet completely lost control of its network and ports.
The crime in KZN is different. It just is. Recall the murder of Nico Swart, the general manager of Richards Bay Minerals, who was killed by the construction mafia for not toeing the line. The transport mafias, who sabotage the railway lines so cargo can be run by road to Richards Bay port, creating epic traffic jams of days long, and ruining the roads. (Do other countries have such neatly defined mafias, as we do? Construction, transport, water and then your less specialised thugs).
These queuing trucks are robbed, and people are killed in traffic accidents caused by the logjams. The political murders in KZN have been so normalised that we don’t even give it a second thought. According to the Global Initiative Against Transnational Organised Crime (GI-TOC), there were at least 10 politically related assassinations recorded between January and April 2024 in KZN. In 2023 there were 31. These are alarming numbers, making political office in KZN a very high-risk profession indeed.
This sort of exciting environment attracts those with a greater appetite for the gun-toting criminal life and is off-putting for the solid, risk averse, paper-pushing civil servant you need to get things done. I shudder to think of the carnage that will follow in the rush to bag every tender on offer if we find the MK Party in charge.
According to the World Bank’s Container Port Performance Index, Durban, Africa’s largest port, is the seventh most dysfunctional in the world. Cape Town at fourth worst, is not helping South Africa’s trade at all and international trade really matters in small economies like ours.
When you live in a rich country, like America, you have lots of people to buy the stuff you make, which means you don’t need to export to have a thriving economy. You absolutely still should, but it’s less critical. South Africa is both small and poor, making it very difficult to sell lots of stuff locally and so global markets really matter.
The problem with exports, is that the governments in foreign countries don’t care about you. There is no duty protection, subsidies and all the other nice things you get at home.
Instead, it’s a blood sport against China and India and any local competitors who don’t want you in their market. In this gladiatorial environment, being competitive really matters and to be competitive, you need well-functioning ports. There is no port of comparable importance to Durban in the whole country and this port is situated in the most unstable province.
To the dwindling pool of sensible politicians in the country, think about us for once in five years and do the right thing. Form a sensible coalition, which keeps the MK Party out of power in KZN.
Donald MacKay is the founder and chief executive of XA Global Trade Advisors. He has been advising local and foreign companies on global trade issues for more than two decades. X handle: XA_advisors; email: donald@xagta.com; website: xagta.com.
* The views in this column are independent of “Business Report” and Independent Media.
BUSINESS REPORT
BUSINESS REPORT