Economic 'fire' could be snuffed through exports

South Africa is “on fire”
with the civil unrest of
student protests because
of the underlying problem
of slow economic growth
which can only be fixed by
building a sustainable local
manufacturing and export-led
economy.
This was the word from
Transnet Port Terminals
CEO, Karl Socikwa, who
urged business leaders to
focus on growing the country’s
manufacturing base to meet
local demand and move
away from self-interest and
dependence on imports.
Socikwa was speaking at
the 2016 KZN Exporter of the
Year awards dinner held in
Durban on Thursday.
He said the export sector
had “taken a beating” due to
the slowdown in the global
economy, including China’s
reduced demand for raw
material exports.
“This has directly affected
the growth of the export sector
which has had a ripple effect
on other sectors and markets.”
Socikwa said the country’s
“fragile economy” faced major
financial risks including
currency devaluation,
inflation and interest rate
hikes, coupled with the risks
of local and regional political
shocks and rising energy
prices.
According to the
International Monetary Fund
(IMF), the world economy is
forecast to grow 3.1% in 2016
and 3.4% in 2017.
“Emerging and developing
country economic growth
will record between 4.2%
and 4.6% growth in 2016
and 2017 respectively while
advanced economies will only
grow at 1.6% in 2016,” he said.
He added that growth in
world trade volumes were
expected to remain sluggish
at 1.7% in 2016 down from
2.7% in 2015. According to
the World Trade Organisation
(WTO), global trade growth
should rise to between 1.8%
and 3.1% in 2017.
Socikwa said exports
and education were key to
local economic growth but
it was imperative for the
country to develop local
demand to reduce dependence
on global trade.
“We need to start localising
demand and consumption to
ensure there is a vibrant local
market for the goods and
services.
“When goods and services
are in abundance and there
is an oversupply these can
then be exported to other
economies around the world.
This approach would work in
our favour because if foreign
demand slumps the results
on our local economy will
not be as disastrous because
there will be enough demand
locally to prevent a collapse,”
he said.
Socikwa urged business
leaders to focus on local
beneficiation and the bigger
picture of economic growth
rather than on self-serving
interests.
“Our country is on fire
around us. We switch on the
television, the signs are there.
If the people of this country
are empowered through
education and job creation so
that they have their dignity
intact and we grow as a
country, we will then start to
see a meaningful impact on
the social ills that still beset
our country,” he said.
CAPTION
TPT CE, Karl Socikwa (left) pictured with Donovan
Phillips, branch manager for the KZN Exporter
of the Year 2016, Röhlig Grindrod KwaZulu Natal,
and Zeph Ndlovu, TPT general manager.