Moments before ringing the bell at the London Stock Exchange on a recent working visit to the UK, Deputy President Paul Mashatile exhorted his audience: “We want you down there!”
That South Africa wants and needs the investment is without doubt, but Mashatile’s body language appeared to tell a different story. As he spoke of his delegation serving as a sales team for the country, he seemed fidgety, now and then gripping the podium like a man unsure of what he was selling. With his words he tried to paint a picture of confidence, but his being seemed to betray hesitation, almost as if he himself wasn’t entirely convinced.
At least one possible reason for his hesitation would not be hard to guess – selling South Africa’s crumbling infrastructure is no easy task.
In a recent Institute of Race Relations report, Reinforcing South Africa’s growth through infrastructure, I explore how infrastructure failures undermine the effective use of the factors of production: land, labour, capital and entrepreneurship. Without reliable infrastructure, these resources cannot be fully leveraged – goods cannot move efficiently, labour mobility is restricted, capital investment stalls, and entrepreneurial ventures struggle to thrive.
Durban
Take the residents in the northern part of Durban, who earlier this year endured dry taps for more than eight days. Communities in Phoenix, Inanda, KwaMashu, and beyond were left to fend for themselves, many being forced to spend money they did not have on bottled water. For those unable to afford this “luxury”, the water tankers they were compelled to sit and wait for became their only lifeline.
Ziningi Xaba from Ntuzuma described to News24 how she and her neighbours spent hours camping on the side of the road, waiting for the tanker that sometimes never arrived. “It’s been hard,” she says, “we have been relying on water tankers… sometimes they don’t come.” This is not just about inconvenience; it’s about a daily struggle for basic human dignity, and the active undermining of the economy.
When people like Ziningi Xaba have to spend hours waiting for tankers, they lose valuable time that could be spent productively. Workers can’t work, entrepreneurs can’t operate, and businesses can’t grow. Every minute spent in survival mode is a minute taken away from earning profit and generating value.
Xaba’s struggle is one example of how unreliable infrastructure cripples daily life and economic productivity. Water shortages are not the only issue. Across South Africa, infrastructure failures mount, with each sector facing its own set of challenges.
Ports
Take the ports, for example. The poor performance is reflected in problems with how things work; for example, at the Port of Cape Town, only four out of 23 rubber-tyred gantry cranes were fully operational by May 2023. Equipment breakdowns like these lead to major delays. At the Port of Durban, the average vessel dwell time is 83.2 hours (at Pier 2), which is more than double the global average of 40.5 hours. These delays translate into revenue losses and weaken South Africa’s position in international trade.
Deputy President Mashatile’s visit to the UK was an important step in securing the foreign direct investment that South Africa needs to rebuild its infrastructure. However, we cannot rely on selling investors a future vision based purely on potential. Serious investors do not commit based on promises – they look for clear signs of progress and certainty before committing.
What do investors want? Most importantly, they demand a proven track record. They need to see that South Africa can deliver on large projects. We must demonstrate that we can get labour moving efficiently, capital investments yielding returns, entrepreneurs earning profit, and land generating value. Every economic transaction relies on these key elements working properly.
If we fix our infrastructure – not to survive, but to thrive – we don’t need to constantly stand “bak-hand”, begging for foreign investors’ spare change. We can offer them something more than a chance to fix our potholes or to keep water flowing in Phoenix, Inanda, or KwaMashu. We offer them a chance to invest in projects that generate returns: new cities powered by reliable energy, ports that compete on a global stage, and rail systems that drive commerce and industry through the continent.
Making money
Investors, contrary to the naïve hope of many, don’t come to help – they come to make money. And that’s exactly why we need to create opportunities where they can profit from our growth, not just our recovery.
We already have the plans we need in Project Vulindlela, a joint initiative between the Presidency and National Treasury, aimed at fast-tracking solutions to energy, water, and transport sectors. Alongside this, we have the Department of Transport’s Private Sector Participation (PSP) framework and the broader Phase Two Government Business Partnership. These initiatives focus on completing the network statement and pricing schedules to give private sector investors a clear understanding of the costs and rules of using the national rail network.
The goal is to open the rail system to private companies, allowing them to transport goods on the national network using their own trains. In addition, plans outline the establishment of a separate, independent infrastructure manager to oversee rail and port infrastructure, while Transnet and private companies handle the day-to-day operations.
We can no longer afford to rely on vague promises of future improvement to sell the country for investments. The focus must shift to urgent, measurable action. An important milestone has been set for Q4 2024 for Phase Two of the Government Business Partnership – by this time the rail network must be fully open to private operators. Failing to meet this deadline is not an option. Achieving it will allow efficient movement of more goods and will inject much-needed competition into the system, which will trigger a surge in economic activity and profitability. This is the only way to transform rhetoric into real progress.
If we achieve quick wins along these lines, the Deputy President won’t just be selling promises, but a tangible record of success that can attract more foreign direct investment.
However, if we fail to deliver, the ongoing infrastructure decline will continue unchecked. It will cost jobs, health, interest, profit, and economic growth. The stakes run high, and the consequences of inaction will prove severe, but the reward for getting it right would truly be transformative.
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Image by Olle August from Pixabay