President Cyril Ramaphosa has stressed the necessity for substantial investment, amounting to approximately R4.8 trillion, to fulfil South Africa’s infrastructure objectives. A notable portion, an estimated R3.2 trillion, is anticipated to originate from the private sector, as indicated by President Ramaphosa.
Speaking at the 2024 Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) at the Century City Conference Centre in Cape Town on Tuesday, 19 March 2024, President Ramaphosa underscored the symposium’s significance in addressing the country’s infrastructure spending shortfall.
Delving into infrastructure, the President highlighted that investment in infrastructure was central to the achievement of the country’s development goals. He further emphasised that infrastructure was an enormous economic multiplier, providing dividends for an economy long after the infrastructure had been built.
However, Ramaphosa pointed out the pressing need for additional investment, stating, “It is estimated that to achieve our infrastructure goals, we need an additional R1.6 trillion in public sector infrastructure investment and a further R3.2 trillion from the private sector by 2030.”
Despite the substantial investments required, several initiatives were being implemented to deliver infrastructure at the required scale and pace.
“We are working on reforms to develop sustainable infrastructure, lift business confidence and encourage investment. These reforms include the amendment of the Division of Revenue Act to enable provincial governments to use their infrastructure grants and budget allocations to crowd-in private sector finance for large social infrastructure programmes,” President Ramaphosa said.
According to the President, amendments to the public-private partnership regulations, which have recently been published for public comment, formed part of broader reforms to mobilise and pool public and private sector resources for infrastructure.
“The operationalisation of the Infrastructure Fund has seen a steady growth in the portfolio of blended finance projects that use relatively small fiscal allocations to de-risk public infrastructure projects and raise finance in debt capital markets. Through the work that has been done in transforming the infrastructure landscape, the total value of the country’s Strategic Integrated Projects has grown from R340 billion in July 2020 to R540 billion now,” said Ramaphosa, who added that 18 projects, valued at around R10 billion, have been completed, covering human settlements, roads, water and sanitation,” President Ramaphosa said.
According to the President, the value of projects currently in construction is over R230 billion
“Projects worth nearly R170 billion are currently in procurement. In this calendar year, 11 such projects, with a total investment value of R45 billion, are expected to reach financial close. To date, Infrastructure South Africa has unblocked a total of R25 billion worth of projects in the renewable energy space using the Infrastructure Development Act to fast-track government authorisations,” the President said.
Despite the daunting financial requirements, President Ramaphosa’s outlined initiatives signify a concerted effort towards accelerating infrastructure development and fostering sustainable economic growth.
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