South Africa’s trade potential remains, to a great extent, largely only that: potential. Due to a decline in quality of rail and port infrastructure, the country’s exporters struggle on a daily basis to get their materials, components and goods out and into other markets. Agriculture and mining in particular, two of the brightest lights in the economy, are hobbled by inefficiencies and other barriers that stand in the way of moving their products across the country and on to ships. The country’s ports are consistently ranked near the bottom of yearly Container Port Performance indices. But, with the serious impingements and risks to trade that currently exist, there are many opportunities for low-hanging fruit reforms to be implemented.In the area of rail, Transnet has proposed that certain rail slots will be opened for private-sector investment and called on bidders to put forward their proposals, for a period of two years. The most crucial caveat here that will undermine substantive investment is that Transnet remains custodian of the infrastructure – and investments therein. This will likely be too great a risk for many investors, and introduces unnecessary uncertainty. Instead, all possible caveats and uncertainties should be limited to the greatest extent. If trade is to have the potentially positive transformative role it can in terms of growth and job creation, maintaining and upgrading the country’s rail infrastructure is a necessary goal to pursue. But without substantive private-sector capital investment and skills development, this goal will remain a dream.In the area of ports, much more needs to be done to capacitate local governments and municipalities to take responsibility for their respective port operations and management. In 2023, the focus should shift away from national government, and towards more local agency and responsibility. The governments of Cape Town and Durban especially should explore ways for them to take on at least some aspects of port operations, as opposed to a national entity such as Transnet being responsible for every single aspect. The more top-down approach that has been followed until now means slower reform, delayed adoption of necessary changes, and a general malaise in terms of responding to challenges as and when they arise.For the time being, South African companies in the exporting and importing spaces – and simply trade in general – should be cognisant of the shortfalls of state capacity, and take the necessary steps to future-proof their operations as best as they can. Exploring different ports as avenues for moving one’s goods into other markets should rank highly on the list of immediate priorities. The Africa Continental Free Trade Area (AfCFTA) is poised to actualise much of broader Africa’s trade potential. But the real work lies with the companies and governments that will push pro-free trade reforms, to make the f low of goods and services across borders easier. The AfCFTA is perhaps one of the best opportunities that Africa will ever enjoy, if it is realised to its great potential. Because many African governments, including South Africa’s, are under sustained fiscal strain, freer trade will only happen when companies and citizens push in that direction.For as long as governments dally on reforming the most basic of trade infrastructure and agreements, the AfCFTA will remain an exciting prospect on paper only. The agreement has the potential to set up Africa – and most importantly, younger African citizens – very well for the future, where they can have access to millions of potential trading partners and customers in their more immediate vicinity. But that potential will remain only that, all talk and little show, if border operations remain (on average) very difficult to navigate, and rail and port infrastructure continues to decline in quality.
