Defend Truth


Subsidies and relief packages won’t help to restructure the minibus taxi industry


Andrew Ihsaan Gasnolar was born in Cape Town and raised by his determined mother, grandparents, aunt and the rest of his maternal family. He is an admitted attorney (formerly of the corporate hue), with recent exposure in the public sector, and is currently working on transport and infrastructure projects. He is a Mandela Washington Fellow, a Mandela Rhodes Scholar, and a WEF Global Shaper. He had a brief stint in the contemporary party politic environment working for Mamphela Ramphele as Agang CEO and chief-of-staff; he found the experience a deeply educational one.

Jacob Zuma’s stolen decade has not only limited the options of Finance Minister Tito Mboweni, but has crippled the ability of South Africa to confront the structural realities of our economy, hastened the demise of rail transport, and hindered meaningful reform of the taxi industry.

Earlier this week, Finance Minister Tito Mboweni, in his Supplementary Budget, “sets out a roadmap to stabilise debt by improving our spending patterns, and creating a foundation for economic revival”, but the consequences of the governing party having supported the stolen decade of Jacob Gedleyihlekisa Zuma are serious and long-lasting.  

Mboweni will have an opportunity to table his second adjustments budget in October, together with the Medium-Term Budget Policy Statement. 

In these troubled times, it will not be enough for South Africa to close the mouth of the hippopotamus”, but rather we will need to find imaginative and meaningful mechanisms for reform and structural adjustments in order for South Africa to not only survive the storm, but also prepare for its future.  

The public transport sector should be a catalyst for economic opportunities and possibilities, and a mechanism for South Africans to connect in a more meaningful way to amenities and services. Instead, delays in developing policy and implementation has meant that the thinking within South Africa’s public transport sector remains largely unimaginative and heavily reliant on road-based solutions. 

SA’s rail system has not simply deteriorated over the past two decades – it has collapsed, and it continues to constitute one of South Africa’s biggest challenges.  

In 2009, the rail system, according to the Passenger Rail Agency of South Africa’s (Prasa) annual report, transported more than 645 million passengers a year (about 53 million passengers a month). A decade later that number dropped to about 240 million passengers a year (or 20 million passengers per month). 

There is an urgent need to ensure that the governance gaps and organisational capacity within Prasa are urgently dealt with, although the transport ministry has not yet appointed a permanent board, and the role of an administrator is insufficient to resolve the issues of the ailing agency. 

In late May, Prasa’s administrator confirmed five key appointments, including that of chief executives at Prasa Rail, Prasa Technical and Autopax.

It’s anticipated that Prasa will resume rail services from 1 July.  

Transport Minister Fikile Mbalula has made efforts to address the Covid-19 situation as it affects the minibus taxi industry, which transports more than 15 million people each day in South Africa.

Mbalula also believes that there is now an opportunity to “transform the taxi industry”. Talk of restructuring the taxi industry is not new. About a decade ago, a number of study tours were undertaken by government officials and consultants to countries across the globe, including cities in South America and Europe, in the hope of finding a solution.

South Africans subsequently saw the development of road-based public transport systems in Cape Town, Johannesburg and Tshwane. The idea was that taxi operators would be encouraged to form registered businesses, and for local councils to then contract them to provide public transport in those cities.  

This “transformation” in the sector was implemented through negotiations underpinned by South Africa’s National Land Transport Act, and supported by the fiscus in the form of the Public Transport National Grant.  The grant structure has, since 2009/10, appropriated in the region of R40-billion, while actual expenditure over the same period has only been in the region of R28-billion. The annual allocation over the current financial period is in the region of R6-billion.

Mbalula is currently offering taxi operators R5,000 each in terms of Covid-19 relief. This is allocated in Mboweni’s budget adjustment in the form of R1,135 billion as “a once-off payment for all licenced taxi operators, provided that they are tax-registered and drivers are registered for unemployment insurance”. The taxi industry is demanding more and an estimated 45,000 taxi operators this week abandoned their vehicles, intimidated fellow motorists and blocked highways, leaving commuters across Gauteng stranded.  

The balancing act by Mboweni in providing fiscal room was enabled by a reduction of the Public Transport National Grant by R1,902-billion, although about R1,096-billion of that has been reprioritised within the supplementary budget in part to fund the relief package for licensed taxi operators.  

National Treasury has also worked to ensure that the funding available within the existing grant framework is also supporting local governments by ensuring that municipalities use up to “25% of their allocations to sanitise such facilities, provide personal protective equipment to public transport workers, arrange for hand-washing facilities and implement physical distancing measures”. 

Critically, President Cyril Ramaphosa has highlighted the value of bringing social partners to the table, and the need for working carefully at establishing a social compact that includes all relevant roleplayers to ensure that we are able to implement real structural changes.  

There is no doubt that the Covid-19 relief package of R1,135-billion will simply not be enough to “transform” the minibus taxi industry, but rather there will be a need to reconfigure the room to ensure that all relevant stakeholders and roleplayers participate.  

The introduction of technology will simply not be enough, but South Africa needs a policy of incremental development whereby formal government agents can walk alongside the minibus taxi industry in order to achieve an end state.  

Critically, this will require improvements to be made to the condition of vehicles across the country (with an important focus on universal access improvements), improving the route and system coverage so that passengers have the benefit of an expanded network, and how this road-based system can complement and support other modes of transport.   

None of this work will simply happen overnight – we will need to confront the elephants in the room, particularly as we need to start developing a real strategy to not simply appropriate public funding once more for the formalisation of the minibus taxi industry. 

Pushing out the problem does not resolve it, but simply pushes the issue down the line – something that government and roleplayers have been comfortable to do for too long. Covid-19 has fortunately focused the minds of many policymakers, and now is indeed the time to make bold, clear and coherent decisions that respond to our collective needs.

We need to develop a meaningful approach to the issue to ensure that we leverage skills development, infrastructure improvement, integration into the broader South African transport system, formalisation in part to ensure protection of workers, particular drivers, and provide a strong and reliable public transport system in South Africa.  

These are the building blocks we must focus on – and not only talk of subsidies and relief packages. Transport must integrate with our social and human settlement planning to ensure that our transport systems respond to the needs of the country as we restructure our collective futures. DM




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