Infrastructure, particularly in a developing country, is a critical foundation for socioeconomic advancement, especially considering that public infrastructure has a critical role to play in poverty reduction, as well as social and economic development, says University of Johannesburg (UJ) School of Economics Professor Miriam Altman.
Public sector infrastructure spending will always lead this effort, she outlines. However, considering that the sector is often plagued with difficulties, she is confident that private sector participation, complementing government’s role in society, will drive improvement under the overall guidance of the National Infrastructure Plan (NIP) 2050.
In South Africa, infrastructure is delivered across three spheres of government, with about 44% of infrastructure spend by State-owned entities. The National Development Plan (NDP) 2030, Altman says, aims for an investment to gross domestic product (GDP) ratio of 30%, of which 10% should be public sector investment.
She states that this is “not a 2030 aspiration” but rather a target upon which the 2030 goals depend and which must be achieved early in the plan. In other words, 10% of GDP should be public sector investment, with most of that aimed at infrastructure.
Currently, in South Africa investment to GDP ratio is about 8%, which is “well below target” and parties should be encouraged to “do something now” to deliver on the target.
One of the big issues around infrastructure delivery, Altman explains, is that the commitment to this target is often less prioritised than that of delivering essential utility services. As such, the focus of South Africa’s NIP 2050 is to ensure infrastructure continues to create a foundation for a higher quality of life and economic growth.
Altman stresses that this foundation should be “resilient to shocks, including financial, institutional and human capacity” and that it should have the readiness to traverse uncertain situations such as energy transitions, flexible transport systems, integrated human settlements and the digital space – from analogue to digital, improving access to public services through e-enablement and readying the population for the future.
This progress should be sustainable, she adds, and should “create equitable services and inclusive spaces that underpin resilience and readiness for change”.
However, the country remains in a state of “tug of war” as institutional stasis locks South Africa into a developmental trajectory that has it reverting to historical positions, which are inconsistent with NDP 2030 goals.
Infrastructure delivery, unfortunately, follows this pattern, Altman laments.
She says that the rules, policies and institutions are mostly in place to enable the reforms and actions needed, though commitment is required to perform management, human resource and talent management services, as is a commitment to a fit-for-purpose approach to implementation.
In this regard, the NIP 2050 sets a vision for the future, with a strong emphasis on immediate actions, and is led by Infrastructure South Africa.
The NIP 2050 gives guidance on themes common to the various sectors, placing significant emphasis on building capacity in knowledge and innovation services, building capacity in planning frameworks, public-private cooperation and stimulation of competition, as well as blended project finance and innovative green finance.
Additionally, the NIP 2050 gives guidance on executive management and technical capabilities within the State and its entities, so that they are stable and can lead and deliver “with confidence”, while also having capacity for economic regulation and driving greater efficiency in infrastructure design and delivery.
Industrial development and localisation will also be key in approaching implementation, says Altman, who stresses that accountability and open reporting will be critical, especially as South Africa looks to address crime and corruption in infrastructure delivery.
Taking all of this into account, Altman says that public infrastructure delivery can “certainly be a central contributor to employment, growth, poverty reduction and equality.
“The aspiration is achievable, though institutional and human capacity is the main constraint. The big improvements are within our power and capacity to do and should be the main focus of all our efforts,” Altman says.
Altman presented at a UJ-hosted webinar on November 3.