Gordhan recognises key role played by transport

Finance minister Pravin Gordhan highlighted the vital role played by transport in supporting economic growth and job creation in South Africa during his 2013 Medium Term Budget speech to Parliament last week. He pointed out that the expansion of the electricity, transport and communications capacity was one of the core goals in the National Development Plan. Transportrelated projects which are either under way or in the pipeline include the expansion of rail capacity to support manganese and coal exports, and the “rehabilitation of the main roadway between Eastern Cape and KwaZulu-Natal. “Ministers Gigaba and Peters are overseeing substantial improvements in road and rail logistics, including reductions in container handling charges at our ports,” he added. South Africa is also supporting regional infrastructure development. “The Development Bank of Southern Africa has provided almost R1.5 billion for road projects in Angola this year and committed funding of R3 billion to energy projects in Tanzania and the Democratic Republic of Congo,” he said. The Medium Term Budget Policy Statement, which was released in support of the contents of his speech, expands on the regional theme, stating “several complementary steps could support faster integration, boosting regional growth and development. “These include expanded transport links and infrastructure networks, and the reduction of tariff and non-tariff barriers to trade and investment. “Enhanced regional cooperation will enable African producers to have increased access to the continent’s largest economy, while boosting South Africa’s exports.” The Policy Statement – which outlines budget priorities for the next three years – recognises that South Africa has to invest in its own infrastructure as well. It states: “The publicsector infrastructure programme is broadening the capacity of the economy to grow by reducing bottlenecks in transport, electricity, water and other sectors." This will support the logistics sector, which is currently in the doldrums. Transport, storage and communication, wholesale and retail trade, and personal services recorded growth rates of between 1.8 and 2% in the first six months of 2013 compared to the first half of 2012. Expenditure by government in transport is budgeted to grow by 8% a year for the 2013/2014 to 2016/2017 budget period. This will take expenditure from R68.2 billion this year to R92 billion in 2016/2017. It is the third-highest increase in expenditure after employment and social security (13.8% to R74.6 bn in 2016/2017) and local government, housing and community amenities (8.4% to R163.2 bn) over the same period. INSERT & CAPTION Expenditure by government on transport is budgeted to grow by 8% a year for the 2013/2014 to 2016/2017 budget period. – Pravin Gordhan