Rooikat vehicles formed part of the army’s response to the July 2021 riots. Photo: Rajesh Jantilal/ AFP/Getty
KwaZulu-Natal businesses have emerged resilient and stronger than ever after enduring the recent triple crises that hit the province despite the currently high level of unemployment and low economic growth forecast for the region.
Toyota South Africa vice president and immediate past president of the Durban Chamber of Commerce and Industry, Nigel Ward, speaking during a business leadership panel discussion hosted in the city by Investec on Friday, said the Covid-19 pandemic, July 2021 civil unrest and April 2022 floods had instilled resilience and united the people of the province.
“I think the three crises made the province stronger and that’s quite ironic, because there’s been a lot of sorrow as we’ve gone through those three big events. But each one has made us stronger for the next one,” he said.
“I tell our team at Toyota every day there is going to be an event in 2024 … and there will be a 2025 event and each one of these, as we stack them up together, is giving us a different perspective of how to change.”
Ward was upbeat about the economic outlook and the rebuilding of the province after the devastating floods, which cost the province more than R17 billion in damages, despite Investec’s forecast of 1,1% growth in 2023.
Ward said he believed the 14 key sectors active across the province had already emerged “stronger” because of the crises and that the government would “turn around” factors hindering economic growth, including the country’s energy crisis and inefficiencies in Durban Port that struggles with cargo handling delays.
He said he was confident that President Cyril Ramaphosa’s office and business leaders were collaborating to confront the priority challenges of energy security, safety and security and logistics after 115 CEOs signed a pledge to assist the government with technical expertise and funding to “reverse the current trajectory”.
“I’m really positive about what’s happening at the port. It will turn around and I am positive about what’s happening with the energy crisis, it will turn around, but not many people know about it. And between the public and private sector, they’re going to start informing people to create that positive energy,” Ward said.
“The people that are running the province, the businesses, it doesn’t matter where they sit in the value change, they need to have some level of confidence that there is hope.”
Ward said it was important for businesses to collaborate with the government on small projects to achieve change. He said had eThekwini Municipality and businesses had not worked together to repair infrastructure in the South Durban Basin after the floods, many small businesses would still be closed.
“We formed some really small partnerships around water, sanitation, power, safety and security that are now widening the circle of influence in the South Devon basin and getting wider and wider … That’s the first point of collaboration that changes the eye point and the mindset that then develops into saying, ‘we’re going to fix the power station’.”
He added that to confront crime and corruption the courts should be open seven days a week.
Shave & Gibson managing director Simon Downes said the big problem facing businesses is load shedding and during the three recent crises, inefficiency and congestion at Durban Port, which has been hampered by ongoing equipment shortages, had been a “major challenge”.
“Our supply chains in some cases have gone up from six weeks to six months and the reason for this is trans shipping. A lot of shipping lines stopped coming here so we were trans shipping from South America through Europe and some ships just kept on going and offloaded on Dares Salem. In London we had to invest in space and inventories and in some cases our working capital ‘trembled’,” he said.
“What we learned is there is no white knight in this country, there is no state support, you’re on your own, so you’re going to be resilient otherwise you aren’t going to survive, and the other thing is you have got to develop very strong logistics relationships.”
He said the port was hampered by equipment that was not properly maintained because politicians would not allow Transnet’s workshops to open on weekends to expedite repairs. He said the port had 128 straddle cranes (a freight-carrying vehicle) three years ago but only had 55 presently.
However, Downes said he is confident that Transnet Port Terminals’ 25 year public private partnership with global port operator, Manila-headquartered International Container Terminal Services, will enable Transnet to grow its cargo volume handling significantly from 1,7 million TEU (twenty foot equivalent units) per annum to 2,9 million TEU per annum over the next two years.
“This is going to revolutionise Durban, it is going to revolutionise transport. And this is the beginning,” he said.
Downes said he believed the government would solve the energy crisis by the end of 2024 as planned.
Neo Ralefeta, the treasury structuring consultant for Investec corporate and institutional banking, gave an overview of the national and provincial economic outlook saying crime and corruption had to be confronted to achieve growth.
He said according to the latest Statistics South Africa Quarterly Labour Force Survey the official KZN unemployment rate is 31% compared to 32,6% nationally, while youth unemployment was a “scary” 59% in KZN, which could have contributed to the July 2021 riots.
“What scares me about these numbers is how stats SA measures unemployment,” he said.
He said the survey included scab labourers who waited on street corners to do odd jobs, asking them the question ‘in the past week did you do at least one hour of labour?’ and then including these people as employed.
“From a growth perspective KZN has grown at 1,1% compared to a national average of 0,6%,” he said.
He said sectors employing the most people in KZN are community and social services (24%), trade (21%); finance (13%) and manufacturing (12%).
He added that the province had potential to grow its economy further by focusing on its trade and transport sectors and marketing itself as a tourism destination.
“I think there’s a lot of positivity … There’s a lot of opportunity and I think we have a lot of low hanging fruit to be able to turn this economy around.”
*This story has been corrected to attribute comments erroneously ascribed to Itumeleng Merafe, to Neo Ralefeta instead.