Although overshadowed by the theatrics of the moment, the South African delegates in the Oval Office last week could agree on one thing: South Africa needs US foreign direct investment and trade agreements (as well as from other global partners) in order to create jobs and grow our economy.  

This is of course not a revelation: South Africa’s biggest employers are also our biggest export sectors, including mining and minerals (such as gold, platinum, coal, and iron ore), automotive manufacturing, agriculture (notably citrus, wine, and nuts), chemicals and petrochemicals, and other industrial goods. On the flip side, our economy relies on the imported machinery and electrical equipment, fuels and oil, vehicles and automotive components, pharmaceuticals and medical equipment, and electronics and consumer goods to drive consumer spending and create even more jobs. 

So, it comes as no surprise that President Cyril Ramaphosa’s diverse team in the Oval Office tried to emphasise South Africa as a trading partner, even as earlier in the day Finance Minister Enoch Godongwana slashed economic growth prospects in his third budget framework of the year.  

But a third event happened last week, one that closely relates to South Africa’s ability to be a stable and reliable global trading partner.  

Ratings agency Moody’s last week raised a red flag about Transnet’s financial viability, warning that without urgent intervention, collapse is not just possible – it’s probable. Transnet’s interest expenses for 2024 amounted to R7.4 billion, surpassing its operating profit of R4.4 billion. A few days after Moody’s announcement, the government announced a R51 billion guarantee facility for Transnet. Not a bailout, but at least the worst outcome was staved off. The billions and billions of rands of debt and interest will remain on South Africa’s collective balance sheet, until such a time that Transnet can service the interest and repay the capital.  

Transnet, like Eskom, is a critical piece of South Africa’s economic puzzle. Unlike Eskom, there is perhaps no direct “lights out” moment for consumers, making it hard to relate to problems at ports and rail. But an enormous portion of our economic activity – and therefore ability to create and sustain jobs – directly relies on Transnet’s ability to operate efficiently and consistently. 

Transnet is the backbone of South Africa’s trade infrastructure, moving the bulk of the country’s imports and exports through its ports, rail, and pipelines. Its performance directly affects every major economic sector, making it critical to growth, jobs, and investor confidence. 

Eskom might keep the lights on, but Transnet’s infrastructure helps us pay the bill to keep the lights on.  

Transnet’s aging infrastructure, unreliable rail services, port congestion, and governance failures – issues that have led to delays, higher logistics costs adding to inflation and lost export revenue across key sectors of the economy – have been on government’s radar for years. Already in June 2021, President Ramaphosa announced plans to introduce private sector participation (PSP) to address Transnet’s lagging performance and ballooning debt. 

Yet four years later there has hardly been progress. Tenders for PSPs are only slowly being announced, and we are as far away from private sector involvement at rail and ports as we were in June 2021. The biggest PSP opportunity at the Durban Container Terminal (which handles more than 60% of cargo in South Africa’s harbours) has been put in limbo due to a court case by the losing bidder. Should their attempt be successful, the worst-case outcome would be to force cash-strapped Transnet to offer the concession to the next-best bidder at a R2 billion discount.  

Exporters and importers need to remind decision-makers and the public that the consistent, reliable and efficient functioning of our rail and port system is critical to their success. It is critical to create jobs. It critical for South Africa’s ability to keep the lights on.  

Strategic communication and stakeholder outreach can help to put them in the room where the decisions are being made, whether it be the Oval Office, Parliament or the Union Buildings. The recent Trump-Ramaphosa outreach showed that it is possible for government, business, and trade unions to come together when confronted with an urgent problem. State-owned enterprises that hold South Africa’s economic success or failure in their hands are one of our most urgent domestic problems.