The Banking Association South Africa (Basa), an industry body representing all registered banks in the country, has called on the government to remove bureaucratic hurdles that stand in the way of the much-needed infrastructure rollout.
The association said while it welcomed the allocation of R17,5-billion over the medium term for catalytic infrastructure projects, more investment could be unlocked if authorities made it easier for investors to pump their money into the economy.
“Basa is convinced that much more funds can be released in a shorter time if government moves faster to approve bankable infrastructure projects and removes bureaucratic obstacles to their financing and construction,” the association said.
“Removing unnecessary bureaucracy and maladministration and increasing state efficiency is the most effective, cheapest way of securing investment in economic and social infrastructure”.
On Wednesday, Minister of Finance Enoch Godongwana used his maiden budget speech to announce that plans are afoot to accelerate infrastructure investment to boost the economy.
The jobs creating construction sector has been in distress for years – with the sector being one of the country’s slowest-growing sectors of the last decade.
South Africa’s construction industry is set to rise after years of decline, including a fall of about 20% last year during the Covid-19 pandemic, according to a new report by ResearchAndMarkets.com, Construction in South Africa – Key Trends and Opportunities to 2025.
The ANC lekgotla held last month in the lead up to the state of the nation address by President Cyril Ramaphosa identified a decline in infrastructure investment; a contraction in real gross fixed capital formation and “delays in implementing government infrastructure projects & long-term stagnation in the construction industry” as key challenges to growth.
Minister of Public Works and Infrastructure Patricia de Lille and head of Infrastructure South Africa Kgosientsho Ramokgopa also provided an update on the country’s infrastructure plans.
“The Infrastructure Fund was operationalised in 2020 with a commitment of R100-billion from government over a 10-year period and has been capacitated with the requisite skills and capacity to enable it to achieve its blended financing mandate. Over the next three years, R24-billion has been allocated to the Infrastructure Fund for blended financed projects,” the two said in a joint statement.
Paul Makube, senior agricultural economist at FNB, said from an agriculture perspective, the commitment for the turnaround plans for state-owned entities and accelerating infrastructure investment through the creation of the centre-of-excellence for private-public partnerships and other blended finance projects was laudable.
“The R17.5-billion over the MTEF for infrastructure will hopefully be a catalyst to repairs of roads, rail, ports, and water infrastructure. Notable announcement on water infrastructure includes the allocation R2.1-billion, R1.4-billion, and the R813-million for
raising the Clan William Dam, the Olifantspoort and Ebenezer plants (Lepelle Water Board), and the Lower uMkhomazi Water Supply Scheme (Umgeni Water Board) respectively all of which are critical for agriculture growth and creation of job opportunities from the sector.”
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