Zuma unveils S.African rail and port investment push
South Africa will invest 300 billion rand ($39.6 billion, 29.7 billion euros) in railroad and port projects over the next seven years in a bid to create jobs, President Jacob Zuma said Thursday.
The nationwide building spree seeks largely to boost mining and exports by connecting key inland regions to the sea and expanding the capacity of the nation’s ports, which include Africa’s busiest port in Durban.
“For the year 2012 and beyond, we invite the nation to join the government in a massive infrastructure development drive,” Zuma said in his annual state of the nation address to parliament, televised live.
The state-owned transport utility Transnet will invest 300 billion rand over the next seven years, targeting mineral exports like iron ore and manganese, while port charges for manufactured goods will be slashed by one billion rand this year, he said.
“Of this amount, 200 billion rand is allocated to rail projects and the majority of the balance, to projects in the ports,” said the president.
The spending was the centrepiece of Zuma’s proposals to combat what he calls the “triple challenge of unemployment, poverty and inequality” — areas in which he has battled to make a dent since taking office three years ago.
The focus on developing the country’s rich mineral deposits sets a firm tone on economic policy days after his ruling African National Congress rejected nationalisation of mines as demanded by its radical youth league.
The mining industry is seen as a key driver against joblessness which has dogged South Africa despite steady economic growth since the end of white-minority rule in 1994, with unemployment at 23.9 percent in the last quarter of 2011.
It is the lowest level since 2009 but rises to 32.7 percent when those who have given up hope of finding work are included — leaving nearly 40 percent of the country in poverty with one of the world’s biggest gaps between rich and poor.
“The results are encouraging, although we are not out of the woods yet, given the global economic situation,” said Zuma of the latest jobs data.
Last year, he announced a nine-billion-rand job fund to roll out over three years, and made job creation a top-five priority alongside education, health, rural development and crime.
A total of 10.9 billion rand had been approved for various job plans and incentives, Zuma told a joint sitting of the parliament’s two houses.
“The work done last year indicates that if we continue to grow reasonably well, we will begin to write a new story about South Africa — the story of how, working together, we drove back unemployment and reduced economic inequality and poverty,” said Zuma.
“It is beginning to look possible. We must not lose this momentum.”
South Africa’s fragile recovery from a recent dip into recession has been bogged down by the eurozone crisis, and the government has struggled to boost employment despite pledging to create five million jobs by 2020.
The state is chasing yearly economic growth of seven percent to support that goal, but the International Monetary Fund cautiously predicts 2.5 percent at best this year, well below 5.5 percent for sub-Saharan Africa.
Styled as a man of the poor, Zuma has scored points for scaling up the fight against HIV and firing ministers over dodgy dealings.
But weak public services and demands for the rolling out of democracy’s gains to all South Africans have added to public frustrations amid anger over graft, mismanagement and a lack of basic services.
State-run schools and hospitals used by the poor black majority are mired in crisis, while the wealthy turn to high-quality private options in a widening social gap 18 years after Nelson Mandela’s democratic election.