Economic development

Govt saddles business with costs, impedes job creation

The problems South African businesses have been facing were spelled out in a television interview by Chris Schutte, CEO of South Africa’s largest poultry producer, Astral Foods.

Speaking on the Afrikaans language channel Kyknet, Schutte said the government told business to be productive and competitive, but then saddled businesses with massive additional costs because of failing infrastructure such as electricity, water, roads and rail.

The result was that money that should have been invested in expansion and job creation was instead diverted to providing services that were the responsibility of the state.

Astral has spent R80 million to generate its own electricity, and diesel for those generators is costing R1.5 million a day. It is building a R100 million pipeline to provide water to its chicken production plant in Standerton, Mpumalanga.

“We used to transport 90% of our raw materials by rail, now it’s 2%. That doubles our transport costs.

“Water is three times more expensive, and electricity is four times more expensive.”

Schutte said the private sector was the job creator. If the government provided the infrastructure that it should, such as roads, rail, water and electricity, then the private sector would create jobs and economic growth.