SA’s R 4.8trn investment gap
INFRASTRUCTURE: GOVT, PUBLIC-PRIVATE PARTNERSHIPS WILL HAVE TO CONTRIBUTE R600BN
Strategy developed to attract funding for these, other projects.
South Africa will have an infrastructure investment gap of R4.8 trillion by 2030 from the aspirational target in the National Development Plan (NDP), unless the country increases its investment.
This is according to Dr Hurbert Joynt, programme manager for Infrastructure SA’s Centre for Excellence, who reiterated that the aspirational target in the NDP is for gross fixed capital formation to comprise 30% of GDP by 2030.
In a presentation and progress report on the roll-out of SA’s infrastructure investment plan, Joynt told a National Council of Provinces select committee last week that this infrastructure investment gap forecast is based on existing investment patterns and what the current target needs to be to meet the GDP gross fixed capital formation target.
The government in July 2021 gazetted 62 strategic integrated projects (SIPs) valued at R340 billion to drive SA’s post-Covid economic recovery. This was followed in October 2021 by the government unveiling a pipeline of 55 new catalytic infrastructure projects from various sectors, valued at about R595 billion, that it estimated would create 538 500 employment opportunities.
However, the government admitted at the time there was a funding gap of about R441 billion for the 55 new SIPs being presented to the market.
Joynt said gross fixed capital formation in the recent past was above 20% but is currently at 14.3%, although the trend line is starting to move upwards again.
“It is a massive target but with all the infrastructure investments [planned] will definitely augment and assist the growth in gross fixed capital formation.”
He said in terms of government expenditure, it is clear national, provincial, local government, state-owned enterprises and public-private partnerships will have to contribute about R600 billion in terms of the existing spend but “will also have to increase that to R1.6 trillion” going forward.
“So it’s quite a daunting task ahead but that is one of the reasons why Infrastructure SA, together with the infrastructure and investment office in the presidency, developed the country investment strategy to ensure we attract additional infrastructure and other investment [to SA].”