ANC seeks R350bn for infrastructure

SA is seeking investments from multilateral lenders, commercial banks and pension funds in what a senior ANC official said will be a more than R350bn infrastructure programme.

The plan will focus on “network industries, such as rail and ports, energy, broadband connectivity, water, sanitation and human settlements,” Paul Mashatile, treasurer-general of the ANC, told London’s Chatham House on Wednesday.

The government was to pitch projects to potential funders on Thursday and Friday, and a symposium will be held on June 23 to discuss the programme, the presidency said.

“We have now generated a project pipeline,” Kgosientso Ramokgopa, head of the investment and infrastructure office in the presidency, said in an interview on PowerFM radio station. “We are not looking at getting money from the fiscus.”

SA has announced a R500bn support programme for an economy that the Reserve Bank forecasts will contract 7% in 2020 due to the coronavirus outbreak and lockdown to curb its spread. However, less than half of the package is new money, and with the budget deficit projected to exceed 10% of GDP, the government will have to tap external funding sources to spur growth even though it would drive up debt.

The country may need about R1.7-trillion to recover, Mashatile said. “About 1.8-million jobs will be lost during this period, mostly among the youth. This is why we will have to push for massive infrastructure spending within labour-intensive sectors.”

Ramokgopa said the programme will create a “huge number” of jobs. He did not give details of which funders have been approached or what projects are under consideration. The cabinet discussed them on Wednesday, he said.

“The government is already in discussion with international partners such as the IMF, the World Bank, the New Development Bank and the African Development Bank to raise $27bn as part of our immediate response to the pandemic,” Mashatile said.

That figure is significantly higher than the Treasury’s estimate of about $5bn it expects to get from international finance institutions. “The government, through the ... Treasury, is exploring all funding avenues to finance all programmes related to Covid-19 and measures aimed at addressing the pandemic,” the Treasury said in response to questions.

“The funding avenues will not be limited locally, but will include exploring all global partners. Funding transactions will be announced officially once concluded.”

SA has shied away from borrowing money from the IMF and World Bank, saying such lending programmes could compromise its sovereignty.

Mashatile said in an interview that he expects the projects to be announced within a week.