R1 trillion infrastructure investment to catapult economy forward

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Government is also implementing an enhanced digitised system to monitor infrastructure projects to ensure checks and balances. Picture: iStock
Government is also implementing an enhanced digitised system to monitor infrastructure projects to ensure checks and balances. Picture: iStock


South Africa is on a path towards unlocking more than R1 trillion in infrastructure investment over the next four years as part of our massive infrastructure investment drive to revitalise the economy and create employment.

We have made infrastructure the cornerstone of our economic recovery and reconstruction plan because of its multiplier effect in restoring economic growth, creating new jobs and protecting livelihoods.

Our infrastructure investments are more than just bricks and mortar, they are targeted projects that have the potential to grow the South African economy, which has suffered severe shock due to the Covid-19 pandemic.

The objective is to use infrastructure to secure dignified work, improve the country’s energy supply, and foster inclusive growth and social protection for those in need.

To be frank, placing infrastructure investment and development at the centre of growing the economy precedes the pandemic.

Read: R1 billion worth of infrastructure abandoned or incomplete in North West

In November last year, President Cyril Ramaphosa identified infrastructure development as a priority area to propel growth.

This will lead to the resuscitation of the supply side, expand manufacturing capacity and create much-needed jobs.

We have received widespread consensus from social partners through numerous strategic consultations that our recovery should be led by infrastructure development and maintenance.

Moreover, international experience has proved that infrastructure development can foster sustainable economic growth and expand employment.

Government is also implementing an enhanced digitised system to monitor infrastructure projects to ensure checks and balances.

China is a prime example of how this boosted its economy sevenfold over two decades ago.

Between 1992 and 2011, China spent an average of 8.5% of its GDP on the construction of public infrastructure.

In the South African context, investment by government in general between 2014 and last year is down by 0.8% on average in real terms and down by 4.9% on average with state-owned enterprises (SOEs).

The result is massive underspending on infrastructure by all spheres of government and the SOEs.

South Africa recorded its third consecutive year of decreasing capital expenditure as infrastructure spending fell 7.6% from R250 billion in 2018 to R231 billion last year.

Read: Newly fixed road linking SA and Botswana is ‘peeling like a fruit’

Work has begun in earnest to reverse this massive underspending and build a credible infrastructure project pipeline that will help us reach our National Development Plan targets.

We have gone beyond the planning phase with an infrastructure pipeline of 276 catalytic projects as we get ready to transform the landscape of our cities, towns and rural areas.

Already, firm investment commitments have been received for 50 strategic integrated and 12 special projects totalling R340 billion.

These projects were gazetted in June to speed up regulatory approval and to fast-track implementation.

These include 15 transport projects valued at R47 billion, 11 water and sanitation projects valued at R106 billion and 18 housing developments worth R138 billion that will produce more than 190 000 houses.

There are also two agricultural and agroprocessing projects valued at R7 billion, three energy projects at R58 billion, a digital infrastructure initiative valued at R4 billion and 15 transport projects valued at R47 billion.

Government is also implementing an enhanced digitised system to monitor infrastructure projects to ensure checks and balances.

Among the transport projects are the N1 Polokwane and N1 Musina routes valued at R1.3 billion.

In the next few months, we will embark on the modernisation and refurbishment of the commuter rail network, including the Mabopane line in Tshwane and the central line in Cape Town.

Through the prioritisation of infrastructure development, the construction sector and its supporting industries are set to become some of the biggest employers.

About 769 500 jobs will be created by immediate projects and, over the longer term, we project more than 1.6 million job opportunities.

We are addressing concerns of corruption and maladministration through our anti-corruption strategy designed specifically for the sector and we are working closely with the Special Investigating Unit to execute the strategy.

Government is also implementing an enhanced digitised system to monitor infrastructure projects to ensure checks and balances. This will bring transparency and give credibility to the implementation of the infrastructure investment plan.

Moreover, to protect our valuable infrastructure investments, we have established dedicated capacity within the SA Police Service to secure the construction industry from violence and intimidation.

The financing of the projects at the scale we require means that government will mobilise private sector investment and provide catalytic funding for strategic projects through the R100 billion infrastructure fund.

This will ensure that the fiscus is not unduly burdened.

Our infrastructure projects are being prepared and packaged for investors by the newly established Infrastructure SA, which is also driving project preparation to enhance transparency and eliminate key risks as early as possible.

The president has described infrastructure as the flywheel of economic growth that will catapult our economy forward.

We are confident that the foundation has been laid for infrastructure to start playing a broader role in our economic recovery.

Ramokgopa is head of the investment and infrastructure office in the presidency


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