{"id":97096,"date":"2026-04-11T14:42:15","date_gmt":"2026-04-11T14:42:15","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth"},"modified":"2026-04-11T14:51:33","modified_gmt":"2026-04-11T14:51:33","slug":"one-company-hindering-south-africas-4-growth","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth","title":{"rendered":"One Company Hindering South Africa’s 4% Growth"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Despite some improvements, Transnet\u2019s incapacity to meet demand through its freight logistics is severely limiting South Africa\u2019s economic growth.<\/p>\n

If Transnet could improve its capacity and meet this demand, the economy could expand by at least 4% year on year.<\/p>\n

This is according to Investec chief economist Annabel Bishop, who explained that private sector operators will be key to increasing Transnet\u2019s capacity.<\/p>\n

However, even with private sector assistance, Bishop said Transnet will likely take several years to improve its capacity to meet demand fully.<\/p>\n

This means South Africa\u2019s GDP will likely only reach 3% by 2030, with the coming years still seeing far slower growth than the country needs to meaningfully improve unemployment and living standards.<\/p>\n

Positively, private sector participation in South Africa\u2019s port and rail networks is increasing, with a major investment recently announced.<\/p>\n

As part of South Africa\u2019s sixth annual Investment Conference in 2026, Traxtion, Africa\u2019s largest private sector rail company, announced a R3.4 billion investment in the country.<\/p>\n

Traxtion confirmed that it is concluding a R3.4 billion rolling stock investment programme to expand freight capacity and support South Africa\u2019s rail reform agenda.<\/p>\n

\u201cThe programme, comprising R1.8 billion in locomotives and R1.6 billion in wagons, is the largest private freight rail investment in South Africa\u2019s history in terms of fleet size and value, with a minimum 60% local content target,\u201d the company said.<\/p>\n

The programme is also expected to create 662 direct jobs during the build and deployment phase, while the added capacity is expected to address about 5% of the national freight rail capacity shortfall.<\/p>\n

While this investment will go a long way in improving Transnet\u2019s freight capacity, these benefits may take some time to materialise.<\/p>\n

\u201cTransnet\u2019s freight incapacity to still meet demand fully has been a substantial limitation on economic growth in South Africa (although there has been some improvement), without which the economy could expand to at least 4.0% y\/y,\u201d Bishop said.<\/p>\n

\u201cPrivate sector operators are key, and more need to clearly be crowded in, as Transnet will take several years to improve capacity to fully meet demand, with GDP over 3.0% y\/y likely only by 2030.\u201d<\/p>\n

The graph below shows the improvement in Transnet\u2019s rail volumes since the adoption of its recovery plan, though levels remain below historic highs.<\/p>\n

In the meantime<\/b><\/p>\n

While improvements are taking place at Transnet, the state-owned utility continues to present a significant threat to South Africa\u2019s fiscal recovery.<\/p>\n

In the Auditor-General\u2019s (AG) latest General Report on National and Provincial Government Audit Outcomes for 2024\/25, Transnet\u2019s financial instability was highlighted as a key risk.<\/p>\n

The utility has achieved an \u2018unqualified with findings\u2019 audit opinion for the past four years, with the AG reporting that weak internal controls contributed significantly to non-compliance with key legislation.<\/p>\n

\u201cManagement continues to disregard legislation and organisational policies \u2013 especially in relation to procurement processes,\u201d the AG said.<\/p>\n

\u201cThe already high irregular expenditure of R3.16 billion incurred in 2024\/25 does not include a further R1.66 billion that was under assessment at year-end.\u201d<\/p>\n

Operationally, the AG also reported that Transnet was lacking, with the utility achieving only 27.7% of its planned performance targets and 8.33% of its operational targets in 2024\/25.<\/p>\n

The AG explained that the underachievement of Transnet\u2019s financial recovery plan from October 2023 to March 2025 further compounds financial risks.<\/p>\n

The AG\u2019s Office found that only 15 of the utility\u2019s 39 planned initiatives were completed, constituting 38.5%.<\/p>\n

This is largely due to both Transnet Freight Rail and Transnet Port Terminals failing to meet key volume and operational targets.<\/p>\n

The AG said Transnet Freight Rail achieved 160 million tonnes of total rail volume against a revised target of 170.3 million tonnes.<\/p>\n

In addition, Transnet Port Terminal\u2019s overreliance on equipment leasing, costing over R1 billion since 2021, contradicts its turnaround strategy and intended focus on asset acquisition.<\/p>\n

\u201cThese failures, coupled with escalating finance costs (R15 billion in 2025) and a recent credit-rating downgrade by S&P Global, signal a heightened risk to Transnet\u2019s long-term sustainability,\u201d the AG said.<\/p>\n

The AG identified the root causes of Transnet\u2019s poor audit outcomes and underperformance as \u2013<\/p>\n

Inadequate oversight<\/p>\n

Ineffective internal controls that result in recurring audit findings<\/p>\n

Poor records management<\/p>\n

Persistent delays in project execution<\/p>\n

\u201cThese systemic governance failures have hindered the implementation of the recovery plan and compromised the entity\u2019s ability to deliver on its mandate,\u201d the AG said.<\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Despite some improvements, Transnet\u2019s incapacity to meet demand through its freight logistics is severely limiting South Africa\u2019s economic growth. If Transnet could improve its capacity and meet this demand, the economy could expand by at least 4% year on year. This is according to Investec chief economist Annabel Bishop, who explained that […]<\/p>\n","protected":false},"author":84,"featured_media":97095,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[275],"class_list":["post-97096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-south-africa-2"],"yoast_head":"\nOne Company Hindering South Africa's 4% Growth - South Africa<\/title>\n<meta name=\"description\" content=\"Despite some improvements, Transnet\u2019s incapacity to meet demand through its freight logistics is severely limiting South ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"One Company Hindering South Africa's 4% Growth\" \/>\n<meta property=\"og:description\" content=\"Despite some improvements, Transnet\u2019s incapacity to meet demand through its freight logistics is severely limiting South ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2026-04-11T14:42:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-04-11T14:51:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2026\/04\/sm_1775906317.142784.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"One Company Hindering South Africa’s 4% Growth\",\"datePublished\":\"2026-04-11T14:42:15+00:00\",\"dateModified\":\"2026-04-11T14:51:33+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\"},\"wordCount\":738,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2026\/04\/sm_1775906317.142784.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/one-company-hindering-south-africas-4-growth\",\"name\":\"One Company Hindering South Africa's 4% Growth - 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