1 year ago

Opportunity Issue 98

  • Text
  • Property
  • Sme
  • Automotive
  • Manufacturing
  • Africa
  • Investment
  • Trade
  • Afcfta
  • Sacci
  • Midvaal
  • Economy
  • Programme
  • Petroleum
  • Sector
  • Global
  • Economic
  • African
  • Municipality
  • Infrastructure
Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors and looks to provide its readers with first-hand knowledge about South African business. Opportunity also looks to present South African business to international markets that may have interests in investing in South Africa. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

TRANSPORT Credit: Group

TRANSPORT Credit: Group Five deficit is estimated at between bn and 8bn, says the African Development Bank (AfDB). Factors affecting infrastructure rollout include onerous lending processes by multilateral banks, poorly prepared projects on the ground, a lack of sufficient off-takers and commercial viability for lenders. China has stepped into the gap, with the value of loans to Africa increasing from less than bn to more than bn between 2000 and 2016. Although much of this funding lacks transparency and is costly for African states, it is helping to fill the gaps in areas such as roads, railways and airports. Poor maintenance of existing infrastructure is proving to be costly with colonial railways barely functioning in many countries and historical trade routes suffering from years of under-investment and over-use. Only 0.8-million of Sub-Saharan Africa’s 2.8-million kilometres of roads are paved and only half of these roads are in good condition. The roads are battered because dilapidated rail infrastructure has pushed most of Africa’s trade onto these roads. Only 84% of the 82 000km rail network is operational and most of these are low-speed, small-scale, undercapitalised and poorly managed networks. Up to 90% of Africa’s trade is conducted by sea but there are few deepwater ports to handle large cargo volumes, resulting in long waiting times for ships, which is compounded by limited berth and docking facilities, weak terminal freight and handling management, and an oversupply of government agencies that delay clearing processes. Few countries have inter-modal infrastructure linking ports to road and rail infrastructure. The African Development Bank maintains that transport costs alone are 63% higher in Africa than in developed countries, with transport costs representing between 30% and 50% of total export in value, which is higher for the region’s 16 landlocked countries. Energy deficits are also significant, with up to 70% of people in Sub- Saharan Africa lacking reliable grid access. One-third of the continent’s total installed capacity is in South Africa and yet it is suffering frequent power outages as a result of under-investment and poor management of its state-owned power utility. Renewable power is not yet being rolled out at scale, with many governments reluctant to loosen regulation in this key sector. Border posts across the continent are a significant part of Africa’s competitiveness challenge. The average waiting time for trucks to cross borders with goods in Africa is 97 hours or four days. Electronic pre-clearance procedures are often ignored by overzealous border officials, who continue to search vehicles. Electronic payment systems can be frustrated by poor Internet connectivity. New systems and technology put in place by trade facilitators hardly dent age-old ways of managing border crossings by officials on the ground, even at one-stop border posts. The busiest crossings are often the least efficient. These include Beit Bridge, the gateway from South Africa to the region, Chirundu between Zimbabwe and Zambia, and Kasembulesa, a chokepoint between Zambia and the DRC. Efforts to upgrade infrastructure and processes have yielded few improvements. The new Kazungula bridge offers logistics companies options as do improving conditions in Beira and Dar es Salaam. These factors go some way towards explaining why the cost of moving a forty-foot (FEU) container from Beira to Lilongwe in Malawi is about 750, including port and handling charges totalling 000 – nearly 10 times the cost through Antwerp, for example. The cost of moving a container through Beira and on to Harare is 800, Beira- Lusaka is 300, and Beira to the Congo a hefty 000. The comparative cost of shipping an FEU 10 000km from Shanghai to Beira is 000. +++ Choices: moving the afcfta forward Given the realities on the ground described in this report, is it realistic to expect the AfCFTA to be the game-changer that it is widely expected to be? In a likely scenario of clear winners and losers, will the free trade tide eventually lift all boats? Given the complexity of existing trade arrangements, and the effort to simultaneously simplify and expand them, a big task lies ahead. The AfCFTA does provide a template for change, with a raft of support structures and mechanisms to address problems of economic asymmetry, trade disputes and issues of unfair trade practices, among others. The odds are stacked against significant change, given the history. But there are many reasons to be optimistic of incremental improvements. For example, trade agreements can do more than lower tariffs and make trade more efficient. They can improve transparency and create a legal framework more hospitable to trade and investment from both within and outside the region. 40 |

Geo Hydraulic and Environmental Technology (Pty) Ltd Specialists in groundwater and environmental services. Credit: Luis Tosta on Unsplash Supported by decades of experience in the industry and in the fields of consulting and research, we are committed to providing our clients with high-quality and cost-effective solutions to their groundwater and environmental challenges. Our technical expertise is the basis of our pride in providing safe, technically sound and environmentally sensitive services. Our team combines geological, hydrogeological, geophysical and hydrological skills, and our skilled operatives are ready and able to meet our clients’ needs. Managing Director John Kalaka Ngeleka has over 20 years of fieldwork and project management experience in the research, mining and oil and gas sectors, firstly as a geologist in the Democratic Republic of Congo and following completion of his MSc in South Africa, as a hydrogeologist. He is SACNASP (Water Resources Science) registered. Geo Hydraulic and Environmental Technology (GET) specialises in: • Groundwater development and supply, monitoring and management • Soil and groundwater risk assessment and management at contaminated sites • Geophysical investigations using imaging systems • Numerical groundwater flow and transport modelling • Basic assessment, scoping, Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) • Water-use licence and waste-management licence applications. Vision GET aims to actively support local and international communities in maintaining and enjoying a safe and sustainable water provision and limited human health-risk environment. Mission To provide clients with innovative, cost-effective and sustainable services related to water and the environment. GET is committed to train young professionals, advise government regulators and private companies and organisations, and to provide technical skills and capabilities to overcome water and environmental challenges. Values Employee and client safety, client satisfaction and innovative costreduction skills. Clients Our clients include companies in the oil and gas, mining, agriculture, manufacturing and construction industries, international and nongovernmental organisations, government and municipalities. Current clients include: • Eskom, Two Rivers Platnium Mine • Palabora Copper (Pty) Limited • West Australia Drilling • German Development Cooperation • Institute of Natural Resources Geo Hydraulic and Environmental Technology (GET) 25 Trichy Road, Raisethorpe, Pietermaritzburg 3201 | Tel: +27 (0) 33 391 0707 | Cell: +27 (0) 78 884 5263 Fax: +27 (0) 86 241 1879 | Email: | Director: | Website:

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