WHITE ELEPHANTS

When driving through certain parts of our country, there are quite a number of monuments depicting events of the past. There are monuments commemorating wars fought and there is the Apartheid Museum to remind us of our country’s development. Today, I do not intend to get involved with these, but I do want to refer to the economic monuments.

The economic monuments are empty factories, warehouses and even ghost towns which developed as a result of the separate development policy and the decentralisation policy because they were established in the wrong locations. Even these are not what I wish to get involved with because it is water under the bridge.

Today I would like to compare the abovementioned white elephants with the inadequate services being delivered by the State, currently forcing the market to take similar wrong location decisions. Through the unavailability of essential services such as electricity, water and roads, businesses are forced to invest in and locate to less advantageous places, purely because the infrastructure in the best competitive locations are either inadequate or cannot be provided sustainably.

Along this vein, a businessman the other day mentioned to me that the single most important location factor for the establishment of their business was the availability of underground water because they could not obtain sufficient assurances from the local authorities about enough water supplies being available to their business in order to be able to exercise the best option for the location of their business.

Another recent example is of a very essential oil seeds processing plant and animal feeds factory having to be established in the second best location because the electricity supply at the optimum site was inadequate.

The issue that I am raising is that today it is not a law (apartheid) or a decentralisation policy that are forcing the economy to erect white elephants, but rather the inability of Government to supply services such as electricity, water and roads that will result in us possibly in another 20 years, driving by ghost towns and derelict factories with broken windows and spider webs, as a result of the wrong location.

We now require sustainable and the most profitable investments that will create employment opportunities for the long term. South Africa has with great urgency and priority scrapped laws to do away with the inefficiencies of the past, but not enough urgency is generated to prevent that insufficient infrastructures does not repeat the same results.

Investments are not something that you can shift as soon as service providers are in place. And investments are especially essential in rural areas where unemployment runs as high as 78%.

With better services in the cities there is a new “law” that so overshadows decisions about location, that it might possibly in 10 years’ time (again?) prove to be uneconomical. The current tendency rather favours urbanisation which definitely does not benefit our policy of development in rural areas.

Agriculture plays a very important role in the development of the rural environment and the present poor services will certainly deal investments
a painful blow.

Jannie de Villiers, CEO