South African state owned entities should employ counter cyclical strategies to survive in an environment experiencing slow growth; this is according to Siyabonga Gama, acting chief executive of Transnet.
Gama also hailed some sectors that were performing well while speaking to CNBC Africa at the World Economic Forum (WEF) in Davos, Switzerland.
“We have industries in South Africa that are world class like in the automotive sector where we have entities like BMW being the best producers of vehicles destined for the US,” he said.
Responding to challenges to do with mechanisation and digitalisation, Gama said his entity would look for alternative ways to avoid redundancy.
“There might be a migration of skills that we have with some skills moving into machines and other people being upskilled to do things [machines] can’t do.”
He said there is a need for South Africa to respond properly to global economic headwinds.
“We need to respond properly to challenges all entities are facing world-over. There is the new mediocre normal environment [of slow growth] we are dealing with,” he added.
Gama also called on the country to continue the drive of addressing the triple challenges of poverty, unemployment and inequality.
“In order for us to continue to create jobs, reduce inequality and poverty we need to adopt a counter cyclical investment strategy.”
He also added that to remain relevant, Transnet will have to find ways to alter the course of its trade so that it continues to grow its stake.
“Some of the cycles are going to be short term in nature; we are not going to be myopic in terms of how we deal with challenges as some of our infrastructure will last over 30 years,” said Gama.
“We need to respond like eagles so as to ensure that in that eye of the storm we can fly much higher as we respond to challenges we continue facing. We will invest according to validated demand so we do not create too much capacity in the economy that is not going to be utilised otherwise you start having lazy capital.”