Energy sector critical to rand's recovery

Thanks to the continuous weakening of the rand, the only certainty in South Africa’s transport industry is an increase in volatility, says Wayne Bartlett, director of logistics broker Hyperlogix Shipping. Bartlett says that it is too easy to dismiss the rand’s weakness as being externally driven. He believes the rand will remain weak if there is no implementation of policies that enable “real employment”. “Until there is a marked decline in corruption and state-owned enterprises begin a return to profitability, the rand will maintain its descent,” he says. In addition, he believes a productive and cost-effective energy sector is imperative for the rand’s recovery. In theory, says Bartlett, the weaker rand makes South African goods cheaper and therefore increases exports and decreases imports, which improves the balance of trade. However, he points out that in practice there are several variables that must be taken into account. Transporting goods to the Democratic Republic of Congo, for example, is paid for in dollars, which means that the importer only benefits marginally. Despite the headwinds facing the industry, Bartlett points out that the Department of Trade and Industry (dti) assists companies and individuals in becoming efficient exporters through its National Exporter Development Programme, which is designed to enhance the market competitiveness of emerging and experienced exporters. “The transport industry is plagued by increasing costs and restrictions and decreasing volumes,” says Bartlett who believes that collaboration between industry and the dti would help to cut costs and facilitate growth and expansion.