SA’s export volumes have improved since the low in mid-2009, but remain 13.4% below the previous peak (see chart attached). While this partly reflects the poor state of the global economy, it also reflects the poor state of South Africa’s export infrastructure. During the past few years it has become evident that South Africa lacks the necessary port and railway infrastructure to significantly expand its export volumes, especially exports of bulk commodities. This means that SA has been unable to fully benefit from the uplift in international demand for commodities.
Fortunately, the price of SA’s exports have risen meaningfully - especially over the period 2006 to 2008, and somewhat in 2010 and early 2011. This means that the value of SA’s exports were boosted by a very favourable price effect, which compensated for the sluggish growth in volumes.
However, the situation could have been so much better had South Africa had the necessary port and rail infrastructure. Under these circumstances SA could have enjoyed both a price and volume boost to exports, which would have provided a far more significant stimulus to the domestic economy. Hopefully, Transnet will deliver on its plans to expand SA’s trade related infrastructure over the coming few years.
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