FINANCING
Chuene Ramphele, group executive: Infrastructure Delivery Division, Development Bank of Southern Africa
The Covid-19 pandemic has reduced economic performance globally and seriously aggravated South Africa’s struggling economy. This reduction in economic performance automatically inflicts a gap in funds available for infrastructure development. It is now vital that we find solutions to deliver the maximum economic benefits from infrastructure investment. By Chuene Ramphele
Making infrastructure development a reality
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ountries around the globe, including South Africa, are hard at work to reconstruct and revive their economies. The language spoken is that of economic recovery plans that are resilient to address the pandemics of poverty, unemployment and inequalities. The recent World Development Report 2020: Trading for Development in the Age of Global Value Chains clearly ascertains that, in order to reverse the serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post Covid-19 by allowing for capital, labour, skills
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IMIESA January 2021
and innovation to move into new businesses and sectors. There is no doubt that the South African government has developed policies to support infrastructure development in South Africa. At this point, we as the role players in the infrastructure space need to focus on harmonising resources and collaborating in support of each other to realise the noble objective of sustainable economic growth. Towards this end, President Ramaphosa’s Economic Reconstruction and Recover Plan – aimed at helping the economy recover from Covid-19 and the resultant lockdown – has placed a strong focus on creating jobs through
aggressive infrastructure investment and mass employment programmes. This is supported by the Infrastructure Fund (IF), which will make available R100 billion over 10 years, with R10 billion in funding in the current Medium-term Expenditure Framework. The IF will be used as viability gap funding for large-scale infrastructure investments. The support will take different forms, including the funding of deserving infrastructure projects, blended co-funding, capital subsidies, or interest rate subsidies and guarantees.
Economic benefits of infrastructure Infrastructure development has huge potential
