R59 highway protests: a no-go for local economy

Belinda Bantham -- Wed, 10/04/2017 - 09:37

R59 highway protests: a no-go for local economy

The ongoing standoff between police and protesters on parts of the busy R59 road near Meyerton in the South of Gauteng is not only halting traffic, but also the Vaal Triangle’s ability to grow economically and to attract investors.

This is according to North-West University (NWU) expert, Prof Danie Meyer. Prof Meyer is a senior researcher within the field of developmental economics and lectures at the university’s Faculty of Economic and Management Sciences in Vanderbijlpark.

In this opinion piece, Prof Meyer argues that the ongoing closure of the R59 highway – which links Johannesburg with the Vaal Triangle region, is set to impact not only Meyerton negatively but also the surrounding towns of Vereeniging, Vanderbijlpark and Sasolburg. This further comes at a time during which the economy of the region is under immense pressure with looming job losses from industrial plants closing down and massive unemployment – reaching more than 40% in certain township areas.

“The Vaal Triangle has the potential to be a vibrant economic growth zone in Gauteng that – through sectors such as tourism – will attract major investors, reignite the manufacturing industry, create jobs and prosperity, but at the current rate this remains but a dream,” says Prof Meyer.

The Vaal Triangle recession

The region has been experiencing a symptomatic recession since 2015 and, according to Prof Meyer, the local economy will not be able to withstand the negative impacts indefinitely. Without significant investment and intervention by all stakeholders – including government – the region will fail to benefit from the recent 2,5% growth in the national economy.

According to Prof Meyer the current situation regarding the R59 highway affects the regional economy both directly and indirectly and as such the stakes are very high especially given the fact that the region is in the midst of a recession.

R59 closure affects entire region

The continued highway closure is causing irreparable damage to the image of the region not only as domestic haven but also as a safe investment destination. Since the highway represents the main movement corridor between Johannesburg and the region, the impact in terms of trade and industry is immense.

Prof Meyer explains that the highway first came under siege in 2014 and since then the highway has been closed annually for long-term periods of time. This situation sends out a message to investors and business partners that the region is not serious about trade and industry and that a spirit of lawlessness prevails.

In terms of the national investment climate, it is important to note that despite the negative growth pattern several so-called positive pockets of investment potential have been identified and are benefitting from investment activities. The Vaal Triangle region is not one of these pre-identified positive pockets of investment and with the current situation in mind, prospects for future investment opportunities remain bleak. According to Prof Meyer the region is experiencing an investment strike and investment activity has come to a complete standstill.