By Fred Hume
In his State of the Nation (SONA) speech, the President gave the nation many reassuring words about how the country’s port and freight problems would be resolved.
However, his comforting messages about the load shedding burden being lightened were followed almost immediately by the country switching over to Stage 6.
This was a stark reminder of the dissonance between the government’s promises and the reality that we, as citizens and business leaders, are feeling on the ground.
Where we find ourselves
Food importers such as Hume International have been dealing with the unending challenge of bottlenecks at our major ports, coupled with bureaucratic delays in having food checked and approved by food inspectors. These challenges in time and costs are compounded by the punishing power cuts to which the country has been subjected. These are all unnecessary hurdles created by poor governance.
And then, as though these issues weren’t enough, along came Mother Nature with a dose of the Highly Pathogenic Avian Influenza (HPAI), also known as ‘bird flu’. Unfortunately, the government’s torpid response to that was equally disappointing.
The International Trade Administration Commission (ITAC) said that it would lift the punitive tariffs on imported chicken to help mitigate, to some degree, the shortages brought about by the bird flu. However, while this decision was a step in the right direction, it was extremely slow to arrive.
Further demonstrating administrative inefficiencies in the system, Hume applied for an ITAC permit on 14 December, but only ended up receiving the permit on 23 January – three weeks into the validity of the permit.
The catch lies in the execution
It's comforting, initially, to hear government express a willingness to change the status quo; whether it’s about the electricity supply or the situation at our ports. But two questions immediately raise their heads: Firstly, is it not government itself that has led us to these dire straits? And secondly, even if a genuine desire exists now to clean the mess, does the will and ability exist within the bureaucracy to implement its promises?
The government's track record in this regard has been far from impressive, and we see no concrete evidence that gives us hope of this leopard changing its spots.
The appointment of an international terminal operator at Durban’s port offers some cause for optimism, although questions have arisen about the transparency of the selection process, and whether this move will result in meaningful improvements in the situation.
And yes, we’ve seen a reduction in the number of ships waiting in Durban, but is this relief just the result of temporary crisis management, or of sustainable solutions? The congestion issues at the port have been persistent, and a short-term solution might not necessarily translate into a long-term one.
Will good intentions be railroaded?
Bringing food into the country via South Africa’s ports is only the first stage of Hume’s endeavours, and it’s followed by what is currently another logistical nightmare – that is, transporting that food across the country.
A recent initiative on the part of government is that private rail operators have been allowed access the rail network, which is a welcome move towards fostering competition and potentially improving efficiency. What remains to be seen, however, is how the government will navigate the regulatory framework around this to ensure fair competition and prevent patronage and corrupt misuse of the system.
We face a further hurdle in the fact the country’s rail network lies in tatters. This will require considerable will and expenditure to restore.
South Africa’s geographical situation perfectly positions us to offer bunkering services during this testing time of conflict in the Middle East, and this provides a window of opportunity for us to show our worth. Again, however, we are waiting for government to present the industry with a comprehensive (and importantly, workable) plan to capitalise on the situation.
We reserve judgement
Hearing encouraging promises at SONA is all very well, but we’ve all heard that political rhetoric on numerous previous occasions. What Hume, as a major food supplier, and South Africans in general, need to witness are concrete steps towards creating a world-class logistics system.
This will drive our economic growth and global competitiveness, and crucially bring stability and lower prices to the country’s beleaguered food supply. But until I witness such tangible improvements, I shall retain my position of realistic scepticism.
Fred Hume is the Managing Director of Hume International.
BUSINESS REPORT