Latest news with #JoeMaswanganyi
The Citizen
12-06-2025
- Business
- The Citizen
Barely able to run ports, state pushes for national shipping company
Development Bank of Southern Africa, one of the few relatively well-functioning state-owned enterprises, is playing a key role in this. The government owned Safmarine for over 50 years – and imports and exports do not depend on whether SA has a national shipping carrier. Picture: Shutterstock It really is preposterous, isn't it? A government that wants to establish a new state-owned shipping company, but whose navy has little to no working ships and whose air force has little to no working aircraft. Thankfully, government is – as it does – moving forward so unhurriedly that we may not see final legislation to create a new state-owned shipping company by the early 2030s. The process to establish the unimaginatively named South African Shipping Company (Sasco) began in 2017 with the publication of the Comprehensive Maritime Transport Policy, under then minister of transport Joe Maswanganyi. In 2022, a pre-draft bill regarding Sasco's establishment was published by the then minister of transport Fikile Mbalula. It took a further three years after that for the department to start engaging stakeholders. Read more Budget 2024: No new bailouts for underperforming SOEs Recently, it invited industry role players to participate in a steering committee to help guide its development. The Development Bank of Southern Africa (DBSA), one of the few relatively well-functioning state-owned enterprises, is playing a key role in this process. ALSO READ: Development Bank of Southern Africa 'is bullish' 'Own import and export trade' 'In particular,' the department says, the state will 'implement radical measures' and intends to ensure 'a significant targeted percentage of exports and imports are moved by the national shipping carrier'. It says the company model 'will enable South Africa to carry its own import and export trade which has suffered a negative growth since the 1980s since South Africa does not have a national shipping carrier'. Not only is this factually incorrect (we had a state-owned shipping company until 1999), it also simply makes no sense. The government owned Safmarine for over 50 years, but it was sold to global shipping giant Maersk at the end of the 1990s, which integrated it into the group in the 2000s. Maersk dropped the brand in 2020. Imports and exports do not depend on whether South Africa has a national shipping carrier. In fact, regulations that restrict cabotage, or the transporting of goods between two ports within the same country, may well negatively impact trade volumes. The policy sees a phasing in of cabotage restrictions, a targeted increase in domestic/state-owned vessels, and legislation on the carriage of government cargo by South African ships. ALSO READ: New minister of transport's five targets a clear and encouraging vision Even Ethiopia has a fleet … As far back as 2013, when Durban hosted the Brics Maritime Trade Forum, government appeared to realise that we were the only of the five founding members of Brics not to own a fleet of vessels. It highlighted that even Ethiopia had a state-owned fleet. Speaking to SAfm Market Update with Moneyweb, transport economist Dr Joachim Vermooten explained that: 'The international shipping industry is a very, very large industry, and it operates similarly to other network industries where you get economies of scope and scale. 'Now, with [just] a few ships you can't get any economic leverage to actually do that – and ultimately it would mean that you would end up with higher shipping rates because it increases the empty directional operations by ships. 'So, I think, you know, under the current economic situation there is no room for actually starting up a state-owned shipping company because we just can't generate the types of volumes to actually make it work. 'And that's why Safmarine was eventually sold to Maersk, which is a very, very large organisation. And before it was absorbed into Maersk itself, the company grew, I think, seven or eight times larger than it had been under the auspices of government ownership.' ALSO READ: Creecy 'very concerned' about Air Traffic Navigation Services woes Won't compete effectively That sums up the problem perfectly. A fleet of five, 10 or even a few dozen ships just won't be enough to be able to compete effectively. Thankfully, The Presidency knows that shipping is a network industry. That's part of the reason why it's rammed through reforms to introduce private sector players into Transnet's underperforming ports. The policy ideologues at the Department of Transport, however, don't seem to get this. Vermooten also says cabotage, which comes from 16th Century France, was adopted across Europe to reserve port-to-port operations for shipping lines run by each country. This principle has been relaxed totally for those within the EEC [European Economic Community]. He adds that 'South Africa's waters are not very conducive to this type of operation'. 'Practically, I think it would be wrong for us to apply a cabotage. We don't have the shipping, we don't have the routes that operate, and our land transportation is so good with trucks in various forms that it's very difficult to think that there are any routes along the coast that can actually financially sustain a shipping route.' ALSO READ: How to fix Transnet's ports in the interest of economic growth 'Billions will be spent' The overarching problem with the bureaucracy in national government (in particular), is that once a process like this starts, it's very, very difficult to stop. The train has left the station. And so the state will inch forward, slowly, and finally yet another state-owned enterprise will be established, complete with funding, a corporate structure (including board seats that must be filled), and staff. By that point, it likely won't own a single ship, but tens/hundreds of millions will have been spent to get there. Once it starts amassing a fleet (even of a single ship), that's where billions and billions will be spent. A cynical view might be that the DBSA is only involved as the fiscus has no money to fund Sasco. But that's the reality. This article was republished from Moneyweb. Read the original here.
Eyewitness News
11-06-2025
- Business
- Eyewitness News
Calls from opposition for Godongwana to quit out of kilter with coalition politics
CAPE TOWN - Chairperson of Parliament's Standing Committee on Finance, Joe Maswanganyi, says calls from the opposition for Finance Minister Enoch Godongwana to quit are out of kilter with coalition politics. The National Assembly on Wednesday afternoon considered a Fiscal Framework and Revenue Proposals that will underpin the 2025 budget for a second time, after Godongwana was forced to withdraw the last version in April, following political pressure both within and out of the Government of National Unity (GNU), and a subsequent court challenge. On Tuesday, the uMkhonto weSizwe (MK) Party lost a vote in the house calling for the Finance Minister to be censured over what it argued was the mismanagement of the budget process. Tabling the committee's report on the latest fiscal framework on Wednesday afternoon, Maswanganyi said drawing up a budget that considers the competing interests of all partners in a coalition government is a complicated process. "The budget adoption process within a coalition government can be quite complex due to the multitude of interests involved. Coalition partners often bring diverse priorities, ideologies and agendas to the table, which can complicate consensus-building efforts. Many countries, such as those in the Benelux region, the Nordic nations and Germany, encounter similar challenges under coalition governance." In response to public objections to the adjustment in the fuel levy to fund the R2.3 trillion budget, Maswanganyi said the committee will put pressure on finalising a review of the country's fuel price structure. The committee noted the stakeholders' rejection of this proposal, mostly citing its impact on the business sector, poor people and low- and middle-income households who spend the bulk of their earnings on food and transportation. ALSO READ: EFF hellbent on having fuel levy hike scrapped, despite losing legal bid
Eyewitness News
05-06-2025
- Business
- Eyewitness News
Parliament's Standing Committee on Finance chair Maswanganyi says debate on fuel levy hike not over
CAPE TOWN - Chairperson of Parliament's Standing Committee on Finance, Joe Maswanganyi, said the debate on increasing the fuel levy was far from over. The fuel levy had been left untouched for three years until Finance Minister Enoch Godongwana hiked it on Wednesday in efforts to meet the budget shortfall. On Wednesday, the uMkhonto weSizwe (MK) Party and the Economic Freedom Fighters both rejected it as a revenue proposal in the 2025 budget when the finance committee met to adopt its report on the fiscal framework, in preparation for next week's vote in the National Assembly. ALSO READ: • EFF hellbent on having fuel levy hike scrapped, despite losing legal bid • Godongwana weighed his options before deciding to hike fuel levy: Mashatile • Treasury defends fuel levy increase Maswanganyi has committed to further discussions on the matter. "We had a very lengthy debate about this in 2022. We will look at that in the next quarter when we have Treasury. We will also bring the Department of Energy on board to discuss this matter and see what can be done moving forward. So, we are not dismissing what you are raising Honourable Moatwe, and Honourable Molefe." Meanwhile, ActionSA's Alan Beesley said that given the widespread financial mismanagement at the Road Accident Fund, which is largely funded by the fuel levy, it should be scrapped on that basis alone. "The RAF collects R50 billion of taxpayers' hard-pressed money. It's a cesspool of corruption and incompetence. It has an adverse audit report. The CEO should be fired. The board should be fired, and it's just sad that we are taking money from hard-pressed taxpayers, giving it to the RAF and that money is literally going down the drain."
Eyewitness News
23-05-2025
- Business
- Eyewitness News
Parliament's finance committees set to interrogate Godongwana's budget
CAPE TOWN - Parliament's finance committees is on Friday set to begin interrogating the latest budget tabled by Finance Minister Enoch Godongwana on Wednesday. The chairpersons of these committees said at a briefing on Thursday that the contestation over a proposed value-added tax (VAT) hike over the last three months has overshadowed what should have been a discussion about government's spending priorities. Chairperson of the standing committee on finance, Joe Maswanganyi, said it was every citizen's duty to pay taxes, and the impression can't be created that they can never be adjusted to fund government expenditure. On Wednesday, the finance minister reset the budget process by tabling a new fiscal framework and money bills, which contain reduced allocations for departments in a R2.5 trillion budget. He swapped a VAT increase for a fuel levy hike, already an unpopular move for opposition parties. But Maswanganyi said paying taxes is unavoidable. 'It would not be right that every time the state talks about increasing taxes we encourage protest. We are not going to run a state on populism.' Chairperson of the standing committee on public accounts, Songezo Zibi, said the budget events of the last few months have, however, necessitated a debate over the powers of a finance minister to introduce tax hikes. 'The finance minister must bring proposals to parliament which are actionable, and parliament should also not use its power arbitrarily to arrive at outcomes which are detrimental.' Parliament's budget head, Dumisani Jantjies, said the legislature had a duty to probe the budget and is legally competent to make changes. ALSO READ: SCOPA chair Zibi says time to get budget process back on track
Eyewitness News
22-05-2025
- Business
- Eyewitness News
Govt's debt service costs must be renegotiated, says chair of Parliament's finance committee
CAPE TOWN - The chairperson of Parliament's standing committee on finance, Joe Maswanganyi, believes the government's debt service costs must be renegotiated. The country spends R1.2 billion a day paying off its debt. With the Finance Minister backtracking on a value-added tax (VAT) increase to fund the 2025 national budget, this will widen the deficit and increase public debt. Responding to the second tabling of a national budget on Wednesday, Maswanganyi said at a parliamentary briefing on Thursday that he believes the third version is credible, pro-poor and pragmatic.
