Worrying increase in rail import dependency

South Africa’s growing reliance on imported rail equipment is raising concerns within the local rail manufacturing sector, with industry leaders warning that rising imports are accelerating job losses and deepening the country’s manufacturing decline. According to Mesela Nhlapo, CEO of the Africa Rail Industry Association (Aria), the country has seen a significant increase in rail imports in recent years as the sector adjusts to reforms that are opening the rail network to private operators. “From 2020 to 2024, we have significantly increased our imports,” she said. “The buyer is not necessarily the state- owned entities. We are seeing rail import dependency growing, with the industry at large opting to rather import.” This, she said, was not because they preferred to import but rather due to a lack of knowledge about where to source rail components locally. South Africa has historically had a rail manufacturing base closely aligned with Transnet. However, the rail reform process and the introduction of new private sector participants are reshaping the industry landscape. A total of 11 private train operating companies have been approved to operate on Transnet’s freight rail network, with four expected to be operational by the end of the year. “These new operators are going to be looking for rolling stock and other rail equipment, making it critical that we create a space where they know where to find what they are looking for and, instead of importing, opt to purchase locally.” Speaking at the Transport Forum, Nhlapo said more than R12 billion had been spent on rail imports between 2020 and 2024, with rail equipment imports averaging around $750 million annually. Local production currently meets only about 20% of demand. “At the same time, if we look at the manufacturing sector, we can see that its share of GDP has collapsed from 22% in 1994 to 11% in 2024. The sector shed 450 000 jobs between 2008 and 2024, with output declining by 0.4% in 2024 alone.” She said it was important to view these trends not only from a rail industry perspective but also from a broader economic standpoint. “At least 7.8m people are officially unemployed, with youth unemployment at around 58.5%. Manufacturing alone lost 61 000 jobs in the fourth quarter of 2025.” She said every R1bn spent on imported rail equipment represented between 2 500 and 3 000 lost jobs that could have been created domestically. “Localisation is therefore not just a policy, but an economic imperative,” said Nhlapo, emphasising that the changing rail landscape offered a real opportunity to drive change. “We have started the journey of rail reform with changing policy allowing the private sector to participate. The national rail policy makes certain important clauses that form the foundation of localisation and transformation and we can create sustainable jobs.” She said the rail sector had an opportunity to coordinate its capabilities more effectively, particularly when operators seek rolling stock, maintenance facilities or components. It’s necessary to manufacture rail components locally and reduce imports. “Localisation for the sake of localisation, however, will not build the country,” Nhlapo said. “We need to own our truth and work together for the common good. It is important that we do not work in silos anymore but recognise that each of us depends on each other.” LV