Mboweni confirms R100bn allocation to infrastructure spending

Authorities has confirmed in its Medium-Time period Finances Coverage Assertion (MTBPS) its dedication of R100 billion over 10 years to the Infrastructure Fund, of which R18 billion is over the medium time period.


The MTBPS mentioned this blended finance fund will complement the federal government’s plans for financial restoration, which have been developed at the side of its social companions in enterprise, labour and civil society and designed to crowd in private-sector finance and experience to help infrastructure supply.

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The allocation to the Infrastructure Fund follows the federal government in July unveiling 50 Strategic Infrastructure Tasks (SIP) and 12 particular tasks involving a complete funding of R340 billion, as the primary tranche of an enormous infrastructure expenditure programme to drive the put up Covid-19 financial restoration effort.

Six sectors

It mentioned on the time these preliminary SIP tasks are anticipated to create an estimated 275 700 jobs in six sectors: water and sanitation, power, transport, digital infrastructure, agriculture and agro-processing and human settlements.

Dr Kgosientso Ramokgopa, Head of the Funding and Infrastructure Workplace within the Presidency, mentioned these “are tasks which can be shovel prepared, so within the subsequent three months we will go into the bottom … and be sure that we’re in a position to cease the haemorrhaging of jobs within the financial system”.


The MTBPS mentioned within the brief time period, the financial restoration plan will give attention to constructing infrastructure, increasing electrical energy technology, allocating digital spectrum, supporting speedy industrialisation, and creating “mass employment”.

It mentioned the federal government will on the identical time roll out structural reforms, comparable to modernising community industries, lowering boundaries to entry, and rising regional integration and commerce.

“The Nationwide Treasury estimates that, together, these reforms can elevate development to over three% over the subsequent 10 years and create a couple of million jobs.”

‘Detailed implementation schedule’

The MTBPS mentioned the plan is accompanied by an in depth implementation schedule that might be overseen by a council chaired by the president and might be supported by a management group that coordinates reporting and identifies areas the place simpler partnerships are required.

The federal government’s give attention to public infrastructure funding follows a pointy drop on this type of funding lately, which was principally pushed by declines in spending by state-owned firms.

Between 2016/17 and 2019/20, whole public infrastructure spending fell from R250 billion to R183 billion, or from 5.7% to four% of GDP, the MTBPS mentioned.

It reported that the true gross worth added within the development sector fell 19.2% within the first half of 2020 relative to the corresponding interval in 2019, including that the sector has contracted for the previous eight quarters.


“The lockdown resulted in a near-complete shutdown of the development sector, which employs over a million folks.

“Employment fell by 10.eight% within the first half of 2020 in contrast with the identical interval in 2019.

“Uncertainty, low funding and electrical energy provide interruptions are anticipated to hamper restoration over the medium time period,” it mentioned.

Consolidated expenditure by perform within the MTBPS revealed that financial growth at four.6% and neighborhood growth at four.three% are the quickest rising capabilities.

It mentioned that is primarily attributable to above-inflation development in highway infrastructure and expanded entry to primary providers consistent with the financial restoration plan.

The MTBPS mentioned it seems that authorities is overpaying for items and providers in a number of high-spending procurement areas, together with infrastructure and data and communications expertise.