RMB CEO: Infrastructure spending now a ‘must do’ for South Africa
JOHANNESBURG - James Formby, the chief executive of RMB, on Monday called for South Africa to urgently start mobilising the Infrastructure Fund to boost the moribund South African economy and said the country could "not afford to wait".
The South African economy was already facing recession before the Coronavirus outbreak.
Director-General of the National Treasury Dondo Mogajane said in a radio interview on Monday. that South Africa’s economy could contract by as much 12 percent and unemployment balloon to more than third of the workforce due to the impact of the coronavirus.
Formby said details of the Infrastructure Fund, which was announced in 2018 as part of government’s Economic Stimulus and Recovery Plan with a commitment of creating a fund size of R100 billion over 10 years, had been scarce.
RMB said it understood the fund was to be administered by the Development Bank of Southern Africa (DBSA) and a head had now been appointed.
" Infrastructure by its nature stimulates growth and jobs and boosts gross domestic product while creating lasting benefit to communities,” said Formby. “Infrastructure spend has a strong multiplier effect on the economy in general.
“People need to design, build, finance, operate and maintain these projects for a long time. In particular, Public Private Partnerships (PPPs), already so successful in South Africa, have high requirements for manpower.”
He said indications were that the Infrastructure Fund was a long-term initiative and it would be some time before the fund’s ambitions were announced, but South Africa could not afford to wait.
“We don’t have much time to get things moving, we need to be bold. The Infrastructure Fund is expected to focus on key sectors identified by government such as water, transport, student accommodation and energy, but we need to ensure priority is given to those projects which improve the lives of many people. The private sector needs to be consulted too as they stand ready to help.”
- BUSINESS REPORT, Additional reporting by Reuters