PRETORIA – President Cyril Ramaphosa on Friday said that the private sector had expressed interest and would be invited to enter into meaningful partnerships with government in establishing an Infrustructure Fund seen as a critical driver of economic activity.
Announcing an economic stimulus plan involving R50 billion in reprioritised spending and new project level funding, Ramaphosa said infrastructure expansion and maintenance had the potential to create jobs on a large scale, attract investment and lay the foundation for sustainable economic expansion.
"With a view to unlocking the potential to create more jobs on a large scale we have decided to set up a South Africa Infrastructure Fund, which will fundamentally transform our approach to the rollout, building and implementation of infrastructure projects. In total, the plan will result in reprioritised expenditure and new project level funding of around R50 billion," he said.
"The South Africa Infrastructure Fund will reduce the current fragmentation of infrastructure spend and ensure more efficient and effective use of resources. The private sector will be invited to enter into meaningful partnerships with government in this fund."
Infrastructure Fund
Ramaphosa said that the contribution from the fiscus towards the Infrastructure Fund over the medium-term expenditure framework period would be in excess of R400 billion, which would be used to leverage additional resources from developmental finance institutions, multilateral development banks, and private lenders and investors.
A dedicated infrastructure execution team in the Presidency with extensive project management and engineering expertise will be established to assist with project design and oversee implementation and to ensure these funds are used effectively and that projects are completed on time and on budget.
Ramaphosa said the Industrial Development Corporation would target to increase its approvals to R20 billion over 12 months, an increase of 20 percent on the previous year, in support of the stimulus efforts.
"This funding will target the productive sectors of the economy, including manufacturing, mining, industrial infrastructure and sectors in distress. We also need short term municipal investments to address the challenges that our people face," he said.
"We have identified 57 priority pilot municipalities in order to unlock infrastructure spending in the short term. This spending will cover, among other things, sewerage purification and reticulation, refuse sites, electricity reticulation and water reservoirs."
The stimulus package kickstarts a range of measures to revive an economy that has struggled to grow significantly over the past decade, and fell into a technical recession with a second consecutive contraction in the second quarter of this year. The measures will include a jobs summit and an international investment conference next month.