Fresh start for SA’s ailing economy with billions lined up for infrastructure projects
CAPE TOWN – Tens of billions of rand have been secured for some of the infrastructure projects that the government has lined up to kickstart the economy out of the Covid-19-induced recession and grow jobs.
The head of the President’s Investment and Infrastructure Office, Dr Kgosientso Ramokgopa, said yesterday there were 276 package projects that could be taken up by local and foreign investors to bolster the economy.
Ramokgopa said the government was working with the private sector on the projects for more than five months.
Eighty-eight of the projects were at a bankable stage – they have been conceptualised and had been tested in feasibility studies.
He spoke at the inaugural Infrastructure Development Symposium SA, which he described as the first and largest conference of its kind in the world.
South Africa’s economic growth is buckling in the face of a global recession made worse by weak growth locally and the devastating impact of the Covod-19 virus on the economy.
President Cyril Ramaphosa, opening the symposium, said although South Africa’s financial system had remained relatively resilient through the crisis, the damage to the economy had not diminished the country’s ambitions for an infrastructure investment programme. “That is why we have put infrastructure at the heart of our economic recovery,” he said.
Investment Envoy Jaco Maree, speaking from his experiences of meetings with many global investors, said South Africa would be competing for funding against many countries also wanting to boost their economies through the Covid-19 crisis.
He said some of the “low-hanging fruit” among the projects being considered needed to be prioritised, so that these, perhaps five to 10 projects, could be completed quickly.
Not only would this showcase to the investment community that South Africa was open for further investment, but it would also provide a medium- to long-term investment horizon for South Africa’s beleaguered construction industry. Public Works and Infrastructure Minister Patricia de Lille said much work was already under way to implement the projects.
She said 55 projects were ready and had received funding, others were commercially viable and being presented to commercial and development finance institutions, while those projects that relied solely on being funded by government would be gazetted and classified emergency projects.
“Infrastructure will be the flywheel to drive the engine of growth in our country,” said Ramaphosa.
He said each province would have its own catalytic projects, and even if those projects did not get off the ground immediately, they would do so in time. “This time we are going to fly with our projects,” Ramaphosa said.
Black Business Council (BBC) president Sandile Zungu said there were three threats to these projects succeeding, which the BBC would do all it could to help overcome.
The first was corruption, second the threat of exclusion of blacks, the youth and women, while the third threat was the weak capacity and capabilities of government.
He said governments worldwide had shown themselves unable to prevent cost overruns on infrastructure projects, workmanship was shoddy and appeared an inability of governments to litigate against the perpetrators. Public-private sector partnerships would be essential if the infrastructure development projects were to succeed, he said.
Ramaphosa said infrastructure investment was an important signal that investment and expansion was happening in the economy, and would lead to the growth in consumer and business confidence. He said while he had already received commitments for funding of some projects, he needed more funding.
Projects would be financed through a range of mechanisms, including commercial funding, blended financing and fiscal allocations. The symposium presented a new beginning, he said.