CityPress - - Busi­ness -

South African com­pa­nies were sit­ting with “lazy cash” on their bal­ance sheets that should be in­vested in ex­pan­sion and mod­erni­sa­tion to stim­u­late the econ­omy, the head of the gov­ern­ment-owned ports and rail op­er­a­tor said this week.

The coun­try’s eco­nomic suc­cess de­pended on pub­lic-sec­tor in­fra­struc­ture spend­ing be­ing “matched and gal­vanised” by com­pa­nies in­vest­ing for growth, Transnet’s act­ing CEO, Siyabonga Gama, said on Thurs­day.

Com­pa­nies in Africa’s most de­vel­oped econ­omy were hold­ing record amounts of cash in the bank, re­flect­ing neg­a­tive sen­ti­ment about prospects for the do­mes­tic mar­ket, Stan­lib As­set Man­age­ment said in Septem­ber.

The 50 largest South Africa-based com­pa­nies re­ported an av­er­age of R10.3 bil­lion in cash or equiv­a­lents in their most re­cent fil­ings, ac­cord­ing to data com­piled by Bloomberg. That com­pares with R9.2 bil­lion a year ago and R7.7 bil­lion two years ago.

Busi­ness con­fi­dence fell to its low­est level in five years in the fourth quar­ter, ac­cord­ing to the re­sults of a sur­vey pub­lished on Thurs­day by the Bureau for Eco­nomic Re­search and Rand Mer­chant Bank.

Transnet plans to spend as much as R380 bil­lion in the next decade to ex­pand and up­grade its port and rail ca­pac­ity in South Africa.

The com­pany had com­pleted an R800 mil­lion ex­pan­sion to dou­ble ca­pac­ity at its Jo­han­nes­burg con­tainer ter­mi­nal, the con­ti­nent’s largest such in­land fa­cil­ity, as it sought to re­duce bot­tle­necks and shift freight from road to rail, Gama said.

“We, as the pub­lic sec­tor, will con­tinue to do our part, but we re­quire a con­comi­tant com­mit­ment from cap­tains of in­dus­try so we can build a stronger and more com­pet­i­tive South Africa,” he said.

“A great num­ber of our South African com­pa­nies have lazy cash on their bal­ance sheets, which we urge must be used as an in­vest­ment to mod­ernise their plants and make new ex­pan­sion­ary in­vest­ments.”

– Bloomberg

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