Ramaphosa wants to pave the way for exports

State-owned logistics monopolies such as Transnet Port Terminals and Transnet Freight Rail will come under pressure to reduce costs for exporters if the government delivers on the promises made by president Cyril Ramaphosa in his 2019 State of the Nation (Sona) address last week. He said government
needed increased exports in order to avoid another recession. “To stimulate growth in the economy, to build more businesses and employ more people, we need to find new and larger markets for our goods and services. “We will therefore be focusing greater attention on expanding exports. “In line with Jobs Summit commitments, we
will focus on the export of manufactured goods and trade in services such as business process outsourcing and the remote delivery of medical services. “We will also be looking at establishing special economic zones that are dedicated to producing specific types of products, such as clothing and textiles,” he said. For the first time government has taken note
of the World Bank’s annual Doing Business Report, which currently ranks South Africa 82 out of 190 countries tracked. “We have set ourselves the target of being among the top 50 global performers within the next three years. “To improve the competitiveness of our exports, we will complete the studies that have begun on reducing the
costs of electricity, trade, communications, transport and other costs,” he said. To do this government will have to tackle the problems highlighted in the “trading across borders” scorecard in the Doing Business index – the country ranks 143rd in the world. Ramaphosa sees Africa as a prime export market. “The agreement on the 
establishment of African Continental Free Trade Area offers great opportunities to place South Africa on a path of investment-led trade, and to work with other African countries to develop their own industrial capacity. “The agreement will see the creation of a market of over a billion people with a combined GDP of
approximately $3.3 trillion,” he said. Import volumes may, however, be affected if Ramaphosa’s plans become actions. “Alongside a focus on exports, we will pursue measures to increase local demand through, among other things, increasing the proportion of local goods and services procured both
by government and the private sector. “Increasing local demand and reducing the consumption of imports is important because it increases the opportunities for producers within South Africa to serve a growing market. “Through this we will intensify the ‘buy South Africa’ programme,” he said.