South Africa’s food supply is under threat from deteriorating infrastructure, poor service delivery, increased load-shedding, and high interest rates.
This is feedback from Consumer Goods Council CEO Zinhle Tyikwe, who told CNBC Africa that the sector is under severe pressure from the rising cost of doing business in South Africa.
Tyikwe said that members of the Council have spent R1.5 billion on alternative power sources since the intensity of load-shedding ramped up towards the end of 2022.
This has exacerbated the existing high cost of doing business in the country.
“It has just become so difficult for businesses to operate in South Africa due to infrastructure challenges, crime, logistical inefficiencies, and load-shedding,” Tyikwe said.
“We are finding that municipalities are struggling to remain functional and the basic services needed for food producers to operate.”
Tyikwe called on the government to work with the private sector to address the structural issues making it difficult for food producers to supply their consumers with goods.
In particular, the government has to create an enabling environment where businesses can operate freely and grow.
Speaking at the Consumer Goods Council’s annual summit, Pick n Pay chairman Gareth Ackerman echoed Tyikwe’s concerns that the cost of doing business has skyrocketed in South Africa.
This has limited the ability of companies to operate profitability, create value, and invest for growth and employment creation.
“The challenge is that the government is not doing its job properly, and we now have to help it in doing things for which we are paying tax for it to be done,” Ackerman said.
“We need to ensure water, electricity, potholes and sewerage are repaired and work. We have to deal with crime and poor service delivery. These are unbelievably depressing things, yet they are basics.”
He noted that the port and rail infrastructure is incredibly ineffective, forcing the consumer goods sector to use expensive road freight, damaging roads.
Business insurance has also increased nearly twofold following the 2021 riots, whilst salary and wage increases have not improved with the rising cost of living.
“It has become a lethal cocktail which needs to be adequately addressed by the government, working together with business to get things going on to grow the economy,” said Ackerman.