Pretoria – President Cyril Ramaphosa on Tuesday said South Africa’s investment in infrastructure has been declining, way before the coronavirus pandemic, and the country now needs to urgently up its investment in infrastructure if the struggling economy is to recover post the Covid-19 pandemic.
Ramaphosa told the inaugural Sustainable Infrastructure Development Symposium of South Africa (SIDSSA), held under the theme “Investing in infrastructure for shared prosperity: now, next and beyond”, that South Africa’s financial system has remained relatively resilient despite the ongoing crisis emanating from the pandemic.
“Yet, the severe damage caused by this pandemic – and the damage it continues to cause – has not diminished our determination to drive an ambitious and sustainable infrastructure development programme. To the contrary, the coronavirus pandemic has made infrastructure investment even more compelling, even more important and even more urgent,” said Ramaphosa.
“That is why we have placed infrastructure at the centre of the stimulus our economy needs to achieve a sustainable recovery. Even before the pandemic, South Africa’s investment in infrastructure had been declining for several years, which, among other things, had caused great hardship for the construction and related industries.”
Ramaphosa said the coronavirus pandemic has had a particularly severe impact on infrastructure service providers both for projects under development and under implementation.
“As a result of the lockdown, they have seen a drop-in demand and revenue. Buyers of infrastructure services have delayed procurement of new projects or cancelled projects.
"Lenders and investors, in turn, are revisiting their decision to invest in infrastructure projects that were deemed bankable prior to the pandemic,” said the president.
He said the cost of some inputs has increased, while some inputs are, at least temporarily, not available due to disruptions in national, regional and global supply chains.
“Lower revenues, higher costs and non-payment has resulted in layoffs, financial losses and cash shortages. This requires that we not only push ahead to revive infrastructure investment, but that we rapidly move to increase the scale of our ambitions,” said Ramaphosa.
“This crisis provides even greater impetus for the implementation of the key reforms necessary to transform the economy to support inclusive growth.”
He said the minister of finance has put forward a package of reforms to address macroeconomic imbalances and boost long-run growth as the crisis eases to lower borrowing costs and provide additional space for infrastructure investment to occur.
“The recovery package is intended to contribute to the speed at which South Africa can emerge from the crisis and improve the capacity of the economy to deliver sustainable inclusive growth,” said Ramaphosa.
The Presidency said the symposium was a culmination of a vigorous stakeholder consultative process over the past few weeks to mobilise support and cooperation on South Africa’s revised Infrastructure Investment Plan.
The consultative process with stakeholders across the public and private sector, was led by Minister of Public Works and Infrastructure Patricia de Lille and head of investment and infrastructure in the Office of the Presidency, Dr Kgosientsho Ramokgopa.