Recent poor weather conditions in Peru have caused a decrease in blueberry exports to the UK, by about 40-60%, creating an opportunity for South Africa to fill the supply gap at a price comparable to Peru.

Ben Goodchild from Nationwide Produce notes that South African sea freighted blueberries could be a viable option for UK buyers if port issues are resolved.

Whether Peru will regain dominance next season or if South Africa will maintain momentum is a question of producer competence - despite higher prices, demand for blueberries remains strong, especially in the wholesale market during the holiday season.

But aside from fresh fruit exports, which the Western Cape still plays an outsized role in, the past decade has seen a massive primary resources boom, as India and China’s rapid economic growth drives demand for minerals of all kinds, many of which are predominantly sourced from South Africa.

And recently, there have been two major Suez Canal crises, first two years ago when the container ship Ever Given created a blockage due to poor steering, and now with the Houthi privateering blockade of the Red Sea, both of which saw massive ship rerouting past the Cape of Good Hope.

Such opportunities arise in every business cycle. Taking advantage of them requires having a functioning bureaucracy and logistical infrastructure.

But South Africa is failing to meet these basic criteria, and is falling behind.

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Infrastructure

South Africa's freight rail network and ports near collapse, and the government has now calculated that our logistic failures account for a loss of up to 6% of GDP.

This is a failure of multiple systems, from administration to technical skills, and even policing, as metals theft is rampant and unchecked.

A Transnet committee aims to restore operations, but their outlook is bleak. Leading coal miners, including Exxaro and Thungela, project a worse year due to rail issues. Kumba Iron Ore faces storage challenges. Glencore and Seriti consider job cuts, and Kumba may follow suit.

Despite committee goals to increase freight rail and port capacity, private sector involvement faces setbacks. Transnet canceled a lease request for the Container Corridor, and speculation grows about issues with the Philippines’ International Container Terminal Service Inc. (ICTSI) in managing Durban port (though the majority ownership of operations remain under a local ANC-connected outfit).

Overall, things are in a nosedive.

The ports themselves have spent most of this year with weeks-long backlogs in container handling queues, and this is only set to get worse, as hundreds of ships reroute past Cape Town in the wake of the Houthi Rebels’ vows to attack any ship within their orbit.

Normally these would take advantage of us for refeulling, transshipping and repairs, but Transnet says the don’t anticipate any ships making the stop. It is hard to trust Transnet’s predictions on this matter, even considering international companies’ recent aversion to our world-beating cargo-handling incompetence - Maersk and others have imposed steep tariffs on ships stopping in South Africa, which saw the backlog in Cape Town clear in a matter of weeks, though Durban is still jammed.

The fresh produce market, already under strain from losses due to wait periods that exceed the shelf-life of their refrigerated products, may face severe losses during the current Red Sea crisis if any of the rerouted traffic makes the additional stop.

The situation has gotten so dire that the global private sector has approached Botswana and Namibia with unsolicited bids for a new 1,500 km Trans-Kalahari Railway, offering an alternative to South Africa's shattered and congested logistics network. Investors from the UAE, Qatar, China, and India have all expressed interest in the project.

The Nam/Bots project, initially focused on coal exports, now targets the Kalahari Copperbelt. The rail line runs from Gaborone to Gobabis in Namibia, connecting to Walvis Bay. Construction is set to start in January 2025.

The railway could even benefit South African companies seeking shorter transport routes, like those in the eastern interior who have rerouted their exports to Maputo from the usual Durban route.

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Administration

While most are well aware of the nightmare of visiting Home Affairs, with the lazy, hostile, entitled and stupid staff that are par for the course teaming up with intermittent blackouts and a centralised data system with no backup.

But for foreign trade, the system is becoming impossible to handle. South Africa faces a year-long backlog in processing visas, impacting tens of thousands of foreign workers.

The delays are affecting various sectors, causing firms to suspend or abandon expansion plans and threatening the country's status as a continental hub. The backlog is attributed to a cumbersome and inconsistent vetting process, causing stress for families and impeding business growth.

The government acknowledges a “skill shortage” hindering development, exacerbated by severe understaffing in the visa processing system. Of course, relaxing racial discrimination policies in staff hiring seems off the table as a solution.

Several reforms are being tossed around, including a points system and a trusted employer scheme, but progress is slow, hampered by political infighting and a crumbling civil service beset by trade unionism and cadre deployment causing political factionalism over looting and patronage opportunities.

The government’s latest solution is to waive visa requirements for China and India, while continuing to stymie migration and investment from the West.

But our accurate reputation for hostility towards foreign workers also don’t do us any favours.

While official requirements for a business visa that can be found publicly currently include a foreign direct investment of at least R5 million, and a 60% local employment criterion, many smaller businesses have found that they additionally require permanent residence permits themselves, just to start a business, which places a three-year barrier to entry which exists almost nowhere else.

Our aggressive workers’ rights laws also make business difficult, and the extension to non-parties clause of the Labour Relations Act allows a cozy relationship between the major cartels and the bigger unions to strike wage and benefits standards agreements that are unaffordable to smaller competitors trying to break in.

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Capital flight

This is causing a massive capital flight in addition to the brain drain that has been going on since the introduction of BEE and employment equity in the early 2000s.

Just this past week, offshore investors sold a net 9.02 billion rand ($487.44 million) of South African stocks last week.

Various sectors, including mining, automotive, and steel, face job losses due to declining commodity prices, power cuts, and export issues. Companies, including Volkswagen and Arcelor-Mittal have made plans to leave South Africa, taking much of our core manufacturing base with them, and returning us to a primary-resource economy amid high unemployment.

But even there, there are shocks coming. The National Union of Mineworkers (NUM) predicts around 10,000 job losses in the mining sector by January, and major strikes including the current platinum mine protest, where white workers were held hostage and beaten, with threats of execution.

And it isn’t just foreign entities closing their doors. 136 local businesses closed doors in October, reflecting challenging economic conditions. Over 1376 business have closed down so far this year, and while optimists may point out that this is 13.0% fewer liquidations than last year, we are still headed steadily downward.

Data indicates a significant wealth migration from South Africa, with high-net-worth individuals (HNWIs) leaving due to all the obvious problems.

But an additional factor is the increased capital controls imposed on offshoring wealth to avoid our steep tax burden.

Approximately 120,000 millionaires globally migrated in 2023, seeking destinations with favorable tax conditions and economic opportunities. These people bring in forex revenue, and with it, significant capital to host countries.

Many migrating millionaires are entrepreneurs, founders, and investors, and their departure is leading to a cratering in job creation and economic growth, especially as their equity investments impact local stock markets and facilitate the funding of capital projects.

Millionaires, through their spending power, indirectly create jobs in various high-value sectors.

The newly planned destruction of healthcare and education through the NHI and BELA Bills recently pushed through Parliament add to the usual poison broth of world-beating violent crime, crumbling infrastructure and administrative obstruction.

Across the board, there are now indicators that spending power has dropped. Absa Purchasing Managers’ Index and Naamsa’s New Vehicle Sales data show declines, and business confidence remains low.

South Africa's Treasury implemented sudden and significant changes to exchange controls, linking financial emigration and the annual R10m investment allowance under a new category called International Approved Transfer (IAT).

The new regulations impose extreme and impractical requirements, including proof of taxpayers' worldwide assets, potentially leading to individuals seeking alternative, legal or illegal, methods for offshore capital accumulation.

The reintroduction of strict forex controls aims to curb the substantial outflow of capital from South Africa, especially since the R10m allowance per person per year was implemented, but it has only increased the demand for tax avoidance solutions.

Wealthy investors who haven't externalized their wealth since 1995 will now be limited to an annual R1m allowance per family member over 18, which has dramatically  decreased in dollar value over the years, creating a gradual squeeze on even the upper middle class, who would barely qualify as middle class in Western countries.

Taxpayers must now disclose both local and foreign assets and liabilities, including details about various asset categories. The process involves providing values at cost and specifying sources of the value, creating a much greater admin burden on taxpayers.

Some tax consultants see this move as the end of the R10m investment allowance and a reversal of the financial freedoms established since 1997, while others highlight the end of gradual liberalization of Exchange Control.

Investors without offshore investments are urged to move their annual investment allowances promptly. The effective elimination of the R10m investment allowance may lead to increased use of current asset swap capabilities by local investors.

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Endgame

With nothing poised to change on any front, the downward spiral continues.

The state can no longer reign in spending, as unions and party patronage networks must eat for the ruling party (or any governing party) to retain control - these groups represent dramatic powers to sabotage and destroy infrastructure and normal business activity, and must be appeased to maintain the delicate veneer of stability that still remains.

In the meantime, tax revenue is going down hard, and without dramatic economic growth in the near future, the state is headed toward a debt default and potential collapse.

Many still pin their hopes on next year’s elections, but the likelihood of the DA-led  Moonshot Pact achieving a majority, up from their 35% polling average, is extremely low.

Whatever happens, we will still have a Charterist government next year, with the ANC at its heart. A DA-ANC coalition, while touted as the “best worst option” by party leaders like Zille, Steenhuisen, Msimanga and Hill-Lewis, would hand the DA no leverage over negotiations, and force them to defend racial discrimination, corruption and malpractice by the ruling party to hold onto power.

The only part of the country capable of surviving is the Western Cape, but without achieving control over migration, policing, infrastructure and the provincial budget, the outlook is bleak.