Deteriorating ports and rail infrastructure in South Africa are benefiting Mozambique and other African countries, according to Dr. Azar Jammine, chief economist at Econometrix.
The significant volume increases at Mozambique’s Maputo Port are seen as a direct result of challenges faced by South Africa’s ports in Durban and Richards Bay over the past year. Businesses are diverting their goods to Maputo to bypass local backlogs, leading to a windfall for Mozambique.
This trend is not exclusive to Mozambique, as other Southern African ports are upgrading facilities to capitalize on South Africa’s logistics crisis. South Africa’s reluctance to involve the private sector in infrastructure improvements may hinder its ability to compete in the long run, with other African countries using this opportunity to enhance and upgrade their ports. The government’s delay in signing agreements for private sector involvement could exacerbate the logistics crisis and impede economic competitiveness.
Exxaro Resources CEO Nombasa Tsengwa recently told Newzroom Afrika that the company is “bullish” on Mozambique’s Maputo port. The company has been moving away from using some of the South African ports and using neighbouring countries’ ports to move their resources out of the country. “We will be reporting some movement through Maputo – that’s where we’ve gotten most success,” she said.
“There was an agreement many months ago to get a Filipino Consortium to start improving our port facilities. That agreement is still not being signed by the South African government.” Jammine said the irony of South Africa’s logistics crises is that other African countries can use this windfall to improve and upgrade their ports, but South Africa is losing revenue that is needed to fix its infrastructure and compete again.
“Eventually, the government will be bankrupt if it doesn’t actually bow down and allow the capability that exists in the private sector to actually intervene to help them improve,” Jammine warned.
