Hello junk, bye-bye shipbuilding boom, promise of maritime prosperity…

THERE was the prospect that, with the drought being broken over the Highveld grain lands, South Africa could be exporting maize, leaving only some other grains to be imported.

The slightly stronger rand could have induced growth in imports, with a commensurate improvement in the prospects for the container sector, while the shipbuilding and marine engineering industries that still require a significant amount of imported components for their work were chugging along, not at the rate that they had done previously, but there was a hint – albeit slight – of a better future.

Some force majeure situations brought unexpected windfalls to the industry. The relatively favourable oil price, backed by a slightly stronger rand, may have helped to ameliorate other dysfunctions in our economy.

And if good rains fall in the Western Cape, the local agricultural sector might produce a good fruit harvest for export next season. Thus the green economic shoots were appearing, and shipping folks had begun to hope for a better year ahead.

Thursday night changed all that. Those who were abed at a respectable time that night awoke to what one analyst called “a horror movie”. I was among those who kept vigil to witness the chilling moment that Number 1 guillotined two principled and key men in the country’s financial ministry, replacing them with others whose past does not inspire confidence.

Initial naive comments by the new finance minister probably sent further tremors through the financial sector. Indeed, a seismic shift has hit the country at the behest of a reckless leader, ignorant that the tsunami following his actions would unleash a protracted period of political and economic instability, and, for the local shipping industry, added woes.

With the suddenness of the Boland earthquake of September 1969, any hopes of improvement in the maritime sector were dashed.

In no small measure, it was the personal integrity of and assurances given by the respected – even presidential – figure of Pravin Gordhan that staved off the feared downgrading by the international agencies last year.

“Junk status is looming,” lamented a leading shipping figure to me over the weekend, and his prophecy was fulfilled on Monday! So much of the promised growth in the maritime industry will fade, as surely as those early green shoots in the economy have been desiccated by the withering blast from Pretoria.

Servicing the nation’s foreign debt at high interest rates will absorb so much of the taxpayers’ money, to the extent that many laudable dreams associated with the much-vaunted Operation Phakisa will be shattered. If foreign or even local loans become difficult to obtain – or come with exorbitantly high interest rates – how will new and essential maritime projects be financed?

In the pipeline is the construction of new salvage tugs, new research vessels for the Department of Environmental Affairs and also for Fisheries, as well as new warships. The inevitable fall in the rand will increase the cost of the construction of those ships for which most major parts will need to be imported.

A lack of investor confidence will push the age-old idea to construct a large dry dock to the back burner, destroying hopes for an ongoing provider of jobs and a significant source of foreign earnings. The quest to increase the size of the local ships’ register will also be on hold.

Who will invest in a country with a shaky economy, with unknown and inexperienced people in charge of the Treasury, and where calls for nationalisation of major assets resound?

Where is the pragmatic pilot who will steer the country on a positive course and restore the years that the locusts have eaten?