South Africa's Rail Industry in Crisis: A Lost Opportunity

South Africa was assigned the continental mandate to lead the manufacturing of rolling stock for Africa in 2015, due to its advanced industrial base and engineering expertise. However, ten years later, the country has failed to implement the mandate, resulting in a decline in the rail industry and a loss of confidence in the country's ability to supply rolling stock to the continent. The failure to execute the AU's mandate reflects a broader pattern of policy inertia and institutional decline that has undermined competitiveness and credibility.

Key Takeaways:

• Transnet Freight Rail's performance has contracted significantly between 2017 and 2025, with freight volumes falling from 226 million tonnes to 151.7 million tonnes.
• Prasa's modernisation programme has failed to deliver, with fewer than 120 usable train sets produced since 2015, and many have been vandalised or remain idle due to power failures and infrastructure decay.
• The Gibela plant in Nigel operates far below its design output, and localisation targets of 65% content were not matched with investment in supplier readiness, testing, or certification.
• Transnet Engineering retains technical competence, but utilisation of its factories fluctuates between 40% and 60% due to irregular procurement and inconsistent funding.
• Skills loss has become chronic, with the number of apprentices in rail-related trades continuing to fall, and qualified engineers leaving the sector.
• Energy insecurity has amplified these failures, with load-shedding and copper theft repeatedly interrupting production schedules and increasing manufacturing costs by up to 25%.
• Rail and port inefficiencies cost South Africa an estimated 4% to 5% of GDP each year, with mining, agriculture, and manufacturing absorbing the losses through higher logistics costs and missed export opportunities.
• Regionally, South Africa's failure to execute has created a vacuum that others have filled, with countries such as Zimbabwe, Mozambique, Zambia, Kenya, and Ethiopia procuring locomotives, carriages, and maintenance services from China, India, and Spain.
• Morocco has built strong partnerships with global manufacturers and now exports rolling stock within Africa, while Egypt has localised metro and mainline assembly lines while maintaining domestic control of core production.

Statistics:

• Transnet Freight Rail's freight volumes have fallen from 226 million tonnes in 2017/18 to 151.7 million tonnes in 2023/24.
• The number of usable train sets produced by Prasa's modernisation programme since 2015 is fewer than 120.
• The cost of rail and port inefficiencies to South Africa's GDP is estimated at 4% to 5% each year.
• The cumulative effect of rail and port inefficiencies on South Africa's industrial standing is a drag on growth and a weakening of the country's industrial credibility.
• The estimated demand for rolling stock in SADC by 2035 is $10 billion, while the broader African requirement exceeds $35 billion.

Sources:

• African Union (2015) - Decision on the Continental Mandate for the Manufacturing of Rolling Stock for Africa
• Pali Lehohla (2022) - "The 2015 AU Summit granted South Africa rights to rolling stock, but ten years later nothing happened..."
• Transnet Freight Rail (2017-2025) - Annual Reports
• Prasa (2015-2022) - Modernisation Programme Reports
• Gibela (2022) - Annual Report
• Nomvula Zeldah Mabuza (no date) - Personal Statement