University of Johannesburg professor says the Eastern Cape is missing trade opportunities because it does not have developed logistics networks that could link it to the country's economic hubs.

Deteriorating logistics network and infrastructure could derail government's latest economic growth and job creation strategy the New Growth Path and Industrial development strategy Industrial Policy Action Plan 2 (I-PAP 2).

This came to light at the second annual Eastern Cape Economic Outlook Symposium held at the East London International Conference Centre (ICC) on Thursday.

Delivering his keynote address at the symposium, new Transnet chief executive Brian Molefe says developing Eastern Cape's Port of Ngqura to its full potential could enable that port to become the transshipment hub for Africa.

This, says Molefe, could position South Africa as the world's gateway for African trade with the rest of the world. It could also enable and drive down trade costs within Africa.

Molefe says intra-trade in Africa stands at about 13 percent, which is low for a continent of its size. With South Africa's costs of transporting goods the lowest in Africa, it would make good business sense to transport goods to the port of Ngqura before setting sail for global shores, says Molefe.

"Poor logistics is a key factor in the marginalisation of Africa in global trade. Ngqura could become the hub of transshipment. It would be cheaper if goods were brought down to Ngqura."

But to make this possible, the rail and roads networks into Africa would also have to be fixed in order to feed the port of Ngqura.

"It is the focus of management at Transnet to increase the efficiency of operations and drive costs down to become more competitive. At some time, we need to pursue a strategy to make the Ngqura Port a transshipment hub and develop common strategy with the Eastern Cape government.

Such a move would make South Africa more competitive in global trade, while alleviating the congestion in the Durban port, says planning specialist at the Eastern Cape Department of Provincial Planning and Finance Litha Mcwabeni.

Mcwabeni adds that South Africa has lost business before because of congestion and high costs of shipping associated with the Durban harbour. If the port of Ngqura is not upgraded to take advantage of the gap that exists in African trade, the province could lose to neighbouring countries like Mauritius, Mcwabeni adds.

When BMW was not prioritised in Durban port, it started taking steps to test the Maputo harbour, which it favours because of it offers faster turnaround time.

"There is massive congestion in Durban and none of the big vessels want to dock there. No major shipping line can afford the expense in terms of time and money."

"The port of Ngqura could be a fundamental platform for development of Eastern Cape. You can forget about long-term growth if you don't sort out logistics and freight system," Mcwabeni says.

Eastern Cape MEC for Department of Economic Development and Environmental Affair Mcebisi Jonas says increasing the manufacturing sector depends on improving logistics framework, in addition to incentive programmes such as the new jobs fund and investment fund.

 "If we are to improve competitiveness we need to look at the incentive framework mechanism which the state could use to support some sectors. Increasing the manufacturing sector depends on changing infrastructure and improving the logistics framework. The capacity of the state is probably the one blind spot of the NGP," says Jonas.

"If we are to drive a robust programme at operational level, we need to ensure the state has capacity."

Professor Gerrit Prinsloo from the University of Johannesburg says the Eastern Cape is missing trade opportunities because it does not have developed logistics networks that could link it to the country's economic hubs.

 "The Eastern Cape government decided not to proceed with linking EC by rail to the KwaZulu-Natal market. Otherwise the timber industry and cattle farmers in the former Transkei could be developed," says Prinsloo. 

He adds that much of the rail and road networks in the country are inland with a higher concentration in Gauteng, rather than at the coast where business could reduce costs and take advantage of international trade opportunities.