Private-public partnerships key to infrastructure turnaround – IRR

Meeting South Africa’s infrastructure goals will require a significant increase in public sector investment to at least 10% of GDP by 2030, coupled with using private-public partnerships to build and manage rail and road networks and ports, and infrastructure needed to deliver water and electricity.

These are among the key points in a new report from the Institute of Race Relations (IRR), Reinforcing South Africa’s growth through infrastructure, the latest in the Blueprint for Growth series.

Author of the report, IRR researcher Anlu Keeve, notes that while the National Development Plan (NDP) of 2012 set a target of reaching 30% gross fixed capital formation by 2030, since 1994 the 20% milestone has been surpassed only once, in 2008, when it peaked at 21.6%.

“This underscores the task ahead,” says Keeve.

The report highlights analysis showing that to meet the NDP’s 30% target, public sector investment will need to rise significantly from the 3.8% of GDP registered in 2021 to at least 10% of GDP by 2030, assuming the traditional ratio of private-to-public investment holds, with private sector investment having to grow from 9.3% to 20% of GDP over the same period.

However, the report says the objective must go beyond simply prioritising infrastructure to ensuring a proper allocation of responsibilities across the various sectors. For this reason, a key focus of the paper is the importance of establishing and facilitating private-public partnerships to construct, maintain and manage important infrastructure, including water, electricity, rail and road, and ports.

The report notes: “The importance of infrastructure cannot be overstated. South Africa aspires to higher levels of economic growth, job creation, and quality of life for all its people. Getting the basics right is the first step to achieving that.”

It concludes: “If the GNU is serious about getting the economy growing and improving the quality of life of all South Africans, it must address the infrastructure problems described throughout this paper.”

If South Africa succeeds in rehabilitating its infrastructure networks, “(the) entire country will shift onto a higher growth track, with incalculable benefits for the people of South Africa and the broader region”.

You can read the full report here.

Media contact: Anlu Keeve, IRR researcher Tel: 071 929 9516 Email: anlu@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za