South Africa’s freight rail and port deficiencies are set to continue and businesses should brace for further supply-chain challenges this year, auditing firm PwC said.
“Aside from the impact of international conflict on local companies, South Africa is also facing domestic challenges set to cause continued disruption in supply chains in 2024, specifically those involving rail and port logistics,” the firm said in its South Africa Economic Outlook 2024 on Monday.
The freight-rail system and all the main ports are operated by state-owned Transnet, which has been dogged by management upheaval, derailments and equipment shortages.
The fallout has been exacerbated by geopolitical tensions stemming from the wars in Ukraine and Gaza that have disrupted international shipping and the flow of key materials.
South African companies need to reduce their reliance on supply chains affected by conflict and prioritize domestic sourcing, production and distribution, PwC said.
It flagged an erratic energy supply, struggling public institutions and high levels of unemployment and crime among the country’s other key challenges.
“Public institutions are overwhelmed and stretched in every direction, and the use of public services in South Africa declined across the board in 2019-2023,” PwC said.