Mozambique and other African countries are benefitting from South Africa’s deteriorating ports and rail infrastructure as the country continues to fall behind the rest of the continent.
This is the view of Econometrix chief economist Dr Azar Jammine, who said there is a direct correlation between significant volume increases at Mozambique’s Maputo Port and South Africa’s port woes over the past year.
Jammine told Newzroom Afrika that many businesses are diverting their goods to Maputo for export to bypass local backlogs.
“Without a doubt, there is a direct correlation. I think the Mozambican government is trying to exploit the windfall that is being provided to it by the deteriorating situation with regard to our ports in Duran and Richards Bay,” he said.
“There have been reports of thousands of these trucks carrying coal and going to the Ressano Garcia border post in Maputo.”
He said these businesses are exporting their coal and other goods through Maputo.
This has placed the Mozambican government in a position to raise its fees for export since South Africa’s ports are increasingly becoming unviable. “So, they are benefiting where we are losing,” Jasmine said.
He added that this is not exclusive to Mozambique, as some other Southern African ports have been gearing up their facilities precisely to take advantage of South Africa’s logistics crisis.
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.
Jammine said this is concerning, as these countries are upgrading ports all around the continent to facilitate increased passage of trade while South Africa is falling behind.
“It’s unfortunate because South Africa is then going to have to fight to get its role back again if, and when, it ever gets its ports back in order,” he said.
In addition, ports in other African countries have less government interference in improving their facilities and infrastructure.
“In Maputo, they’re quite happy to get outside parties to come and do the work to upgrade their facilities,” Jammine said.
“In South Africa, there’s a distinct ideological reluctance on the part of government to get private sector bodies involved.”
“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.