South Africa To Invest R943.8 Billion In Infrastructure In Next Three Years

South African government said it will invest R943.8 billion in infrastructure in the next three years to support new reforms to aid the public infrastructure and encourage private sector participation.

Finance Minister Enoch Godongwana said on Wednesday in Parliament said by introducing new reforms, the government will be able to "strengthen the public investment management and the associated value chain. We will also attract private sector participation," SA News reported.

The investments include R486.1 billion from state-owned companies and public entities, R213.8 billion from municipalities and R224.8 billion from provincial and national governments.

Furthermore, the consolidated spending on buildings will be increased by 15.9% in the next three years.

"We gazetted the amendments public-private partnership (PPP) regulatory framework for public comments earlier this week. The amendments seek to reduce the procedural complexity of undertaking PPPs, create capacity to support and manage PPPs, formulate clear rules for managing unsolicited bids, and strengthen the governance of fiscal risk," the minister explained.

"We are reviewing institutional arrangements and governance for catalytic infrastructure. The intention is to create clearer mechanisms for accountability, cooperation and coordination. We are also consolidating similar functions to reduce duplication and inefficiencies," Godongwana added.

The government is also rolling out new financing instruments like infrastructure bonds and concessional loans.

The minister noted that the government intends to expedite the delivery process, especially of "blended finance arrangements."

"As part of this, a flow-through tax vehicle for specific infrastructure projects, similar to trusts and other investment vehicles, is being considered. A new funding window for proposals under the new dispensation of financing instruments will be opened to public institutions shortly," Godongwana said.

According to the minister, these reforms will allow the government to achieve greater efficiency gains and infrastructure delivery will be fast-tracked. Also, it will help the network sectors, social infrastructure, PPPs and blended finance projects.

Last year, Tsakani Maluleke, the auditor-general of South Africa (AGSA), said that delays in infrastructure projects have often led to them costing more than originally planned. He audited over 100 infrastructure projects in 2022 and pointed out that several of the delayed projects were of poor quality.