AFDB’s Quaynor Talks About Transnet’s Turnaround Strategy and African Trade Importance

Transnet's Connecting Africa Conference took place and my colleague Keamogetswe Mosepele was there. She spoke to Solomon Quaynor, Vice-President for Private Sector, Infrastructure & Industrialization at the African Development Bank on the state-owned logistics company's turnaround strategy and its significance on trade in Africa. Let's listen in. Let's look at the loan in the context of South Africa and Southern Africa. Transnet is the critical logistics operator in South Africa. Without Transnet really operating at its optimum, it impacts private sector's business in terms of its ability to grow. Because the monopoly logistics operator is really Transnet. So, we are working with Transnet. They have an $8 billion capital investment program over the next five years. However, because of really the past issues that have weakened Transnet, and there are a number of them, we are supporting, along with the New Development Bank, an initial recovery CapEx program of $2 billion, of which we, as the AFDB, provided $1 billion. So, for us, this is more the critical test. We are providing the critical funding to really help Transnet begin the turnaround investments to rehabilitate its infrastructure network. And then, once that is successful, the rest is more really invested in infrastructure for growth. So, I like that you've touched on Transnet's turnaround strategy, which for South African natives is something that we've seen over the years deteriorate. Just touching on the AFDB's view on the infrastructure challenges that Transnet is facing, how does the bank view that, particularly within the context of Africa or Africa's associated risk premium? What is the approach from the bank in terms of that? So, this is a case in which we need to rather focus on the reasons for the infrastructure disruption, which has led really to an optimal performance by Transnet. For example, the theft of really the copper wires on the rail tracks, which has led to a lot of derailments and disruptions in operations of the rail network. I mean, these are the sorts of things that we believe Transnet is equipped to remedy, to rehabilitate the infrastructure and bring its operations really to the past glory of Transnet. And so, for us, let's put aside the African premium and all of these other matters. We are the AFDB. We understand Africa. We understand infrastructure. We are the ones lending to Transnet. Likewise, the New Development Bank as well. These are two development institutions really showing the way. And so, for us, we're not really worried about the Africa risk premium in this case. And I'd also just like to know how Transnet fits into the broader context of regional integration and trade within Africa. And what are the bank's plans to support this? So, essentially, we operate in regional corridors. So, as much as Transnet is a South African company or a South African entity, several regional corridors actually end up in the ports of Durban and other ports in South Africa. So, the rail network that expands beyond South Africa that also goes to SADC countries as far as DRC are very important in making sure that – I mean, Transnet is also critical for the effective operations of those regional corridors. So, therefore, Transnet has an importance not just for the South African economy, but really for the Southern Africa and Central African economies. And so, for us, as the AFDB, we're pan-African in terms of our focus. We're looking at developing regional corridors really across Africa and supporting Transnet is also supporting several corridors coming through, including, for example, the North-South corridor that comes through South Africa to the port of Durban.

On the side-lines of Transnet's Connecting Africa Conference, CNBC Africa’s Keamogetswe Mosepele spoke to Solomon Quaynor, Vice-President for Private Sector, Infrastructure & Industrialization at the African Development Bank on the state-owned logistics company's turnaround strategy and its significance on trade in Africa. 

AfDB’s Quaynor speaks on Transnet’s turnaround strategy 

On the side-lines of Transnet's Connecting Africa Conference, CNBC Africa’s Keamogetswe Mosepele spoke to Solomon Quaynor, Vice-President for Private Sector, Infrastructure & Industrialization at the African Development Bank. 

AfDB’s Quaynor speaks on Transnet’s turnaround strategy

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AfDB’s Quaynor speaks on Transnet’s turnaround strategy

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