There’s an unfortunate narrative that portrays private sector capital as a bottleneck to infrastructure development in SA. This growing pool of capital, the story goes, is sitting idle in the bank accounts of businesses and corporations, which are unwilling to fund productive infrastructure projects that could improve lives and drive economic growth. That narrative is deeply flawed.
The need for such an enabling environment could not be more urgent. Fixed investment growth has been waning since 2010 and the consequences are painfully evident. Electricity shortages, inadequate transport networks and ailing civil infrastructure have, for too long, been a binding constraint on SA’s economic growth and thus on our ability to reduce desperately high levels of unemployment and poverty.
This is not a pipe dream. We know it is possible because we’ve done it before. In the first decade of our democracy, sensible economic policies, combined with strong political will and a willing private sector, helped reverse the fortunes of a functionally bankrupt state. This is not to say that the interests of other government stakeholders should fall by the wayside. It is rather a commitment by these public officials to the overarching goal of infrastructure development, understanding that achieving this objective will require hard work, innovative thinking, and compromise.
The government should scour the globe for international talent with hands-on experience in setting up concession arrangements and other public-private funding models. We are not the first country to face this challenge and there is no need to reinvent the wheel. This is something the private sector has been saying for some time now. Policy reform is needed urgently, and we look forward to seeing and contributing to the amendments that the head of the investment and infrastructure office in the presidency, Kgosientsho Ramokgopa, and his team will be proposing in the Infrastructure Development Act and existing private-public partnership regulations.
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