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SOUTH AFRICANS WILL PAY THE PRICE IF THE TRANSPORTATION CRISIS IS NOT CHECKED – ECONOMIST

JOHANNESBURG, South Africa – Professor Adrian Saville, an economist, believes that if the present Transnet situation is not addressed, ordinary South Africans will pay the price.

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It includes an R47 billion guarantee facility, about half of which will be used to address urgent liquidity issues, including clearing some of Transnet’s debt.

This is with the state-owned logistic company facing a raft of financial and operational challenges at the moment, including crippling backlogs at some of South Africa’s major ports.

Saville explained the impact on the man on the street.

“If you can’t get things out, it means critical output, especially commodities, can’t get from pit to port. That means the South African economy struggles to grow, government doesn’t get the necessary revenue and if you can’t get revenue from the mining houses, you need to get government revenue or taxes from households, so you can anticipate a shift in the tax burden to South African households.”

Saville also explained the impact of not being able to get goods into the country.

“And if you can’t get things in, it means things that would otherwise be on the shelf are sitting on the ocean. 52 ships are sitting outside of Durban harbor. They can’t get in; R700 million of that is Pep stock that isn’t going to make its way to the shelves in time for Christmas. Prices go higher as shelves are less abundant.”