Violence, xenophobia, hacking chips away at SA’s ‘gateway to Africa’ title

Date: 27 Jul 2021

Disinvestment last seen under apartheid looms, as investors expand ports elsewhere on the continent, due to our unstable transport routes

South Africa is losing its grip as the ‘gateway to Africa’ after the recent unrest and looting in Durban and the burning of trucks on the N3 highway.

And now, to add the the country’s woes, Durban’s port has been closed as well due to a systems hack. This will have severe consequences for the country’s already battered economy.

The country has for many years been the main entry-point to the continent, with the country’s busiest harbour in Durban receiving and dispatching goods from all over the world.

“Our ports handle at least 6 500 containers per day, with Durban handling 4 100 of those, which is three containers a minute. Durban is the largest and busiest harbour in all of Sub-Saharan Africa. The N3 handled 6 600 trucks per day in May,” economist Mike Schüssler says.

READ: Transnet hack update: Source of possible cyberattack identified

Where does all this cargo go?

Schüssler says this incredible movement of cargo goes from Durban to the entire Southern African Development Community (SADC). Other SADC countries have harbours, but SA harbours accommodate bigger ships, while the country also has massive transport infrastructure in the form of trucks and trains.

He says Maputo harbour is growing, as well as Walvis Bay, but both are far smaller. Zambia may get a lifeline from Walvis Bay now that the Kazungula bridge connecting the country to Botswana is open.

“In Africa, trains make up just 5% of transport, whereas in SA it is about 15%. We also have a massive oil/petroleum pipeline and we transport many goods from Durban to as far afield as the Democratic Republic of the Congo, Malawi and Botswana.

“There are no other countries that can do what we can, but with our xenophobic attacks and now the riots, we will see a shift to Maputo, Beira and Walvis Bay. Even combined they are still smaller than the volumes Durban moved, but if they take, for example, 5% or 10% of volume away, it will become more difficult to finance upgrades.”

Schüssler says he suspects some goods will also be shifted to Dar Es Salaam, but overall Durban should still be the biggest and most important port in SADC over the next few years. However, he warns, the change is coming and South Africa will not like it, but “we will have only ourselves to blame”.

ALSO READ: N3 closure costs economy R1 million per hour, as riots continue

He points out that some transport operators already have Africa divisions to help other African country exporters and importers find alternatives to Durban as far as possible. Dubai Ports is also investing more into Maputo, while Walvis Bay has attracted some investments from car manufacturers.

Urgent warning for government

Schüssler has issued an urgent warning for government and South Africa: “We need to upgrade and privatise our ports and roads. We need Transnet to find its efficiency quickly, or allow private rail operators who can deal with stolen tracks.

“We need police or the army at each toll plaza. We need to move to cardless movements like here in Gauteng, to ensure that trucks do not have to stop, because that is when they get attacked.”

Supply chains must not be interrupted

Dr Juanita Maree, chairperson of the South African Association of Freight Forwarders (SAAFF) also strongly condemned the destruction of the country’s key infrastructure, goods and property.

“We respect South Africa’s laws and the Constitution, but it is time to take action. It is time for us to work together, make plans, implement those plans and ensure that our supply chains continue to operate.”

She says for the economy to function and for people to survive and prosper, supply chains need to function unimpeded. “The closure of the Port of Durban and parts of the N2, N3 and N4 over recent days as a result of the senseless looting and destruction of trucks, their cargo, shopping malls, distribution centres and beyond has severely impacted our supply chains.”

This has massive short-term consequences and even more devastating long-term impact for everyone, but even worse, the impact of the past few days will reverberate far beyond South Africa’s borders, she explains.

ALSO READ: R100bn needed for Port of Durban expansion, says Ramaphosa

The ripple effect

Her sentiment is echoed by Mike Fitzmaurice, CEO of the Federation of East and Southern African Road Transport Association’s (FESARTA), who says what happened in South Africa also had a major effect on other landlocked countries in the SADC region, who rely heavily on South Africa for imports of goods such as fuel, groceries, pharmaceuticals, mining equipment, spares, vehicle spares and tyres.

“These countries that have used South Africa as a transit route for exports through the Port of Durban will now turn to alternate routes for exports such as Walvis Bay, Beira and Dar es Salaam. This does not bode well for South Africa’s global image.

“We are likely to see some large-scale disinvestment in the country, as we did in the apartheid era. We can expect to see further downgrades to our junk status by the likes Moody’s, Fitch and Standard & Poor’s in the short term and the Rand is likely to breech the R15 to the dollar very soon”.

SAAFF is appealing to all key stakeholders to play an active role in restoring South Africa’s crucial trade lanes along the main transport corridors of the N2, N3 and N4 and protecting commercial ports as key national areas of interest.

By Ina Opperman
Business Journalist

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