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REVIEW : High risk keeps Africa from surfing infrastructure investment wave

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Urgent action is required for African nations to prepare metropolitan areas for an unprecedented surge in population. According to the African Development Bank (AfDB), the continent's capacity to plan for rapid urbanization will shape its economic trajectory for generations. However, recent events have hindered progress, making it imperative to address this situation promptly. According to Craig Weitz, principal of Africa Infrastructure Finance at Nedbank, in recent years, Africa's progress in planning for rapid urbanization has been hindered by a series of events. Firstly, the COVID-19 pandemic forced many governments to redirect their infrastructure budgets to address the health and social costs of caring for citizens. Secondly, the prolonged recovery from the pandemic, coupled with the impact of the Russia-Ukraine war on global economies, further strained fiscal resources. High-interest rates have made borrowing expensive and weakened local currencies. The United Nations (UN
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REVIEW : Can the new government drive a sustainable infrastructure boom?

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The South African construction industry has experienced a prolonged downturn, with the fourth consecutive quarter of decline signaling an extended period of weakness. The industry faces numerous challenges, such as seasonal fluctuations, high capital costs, increased interest rates, and inefficiencies in local government approval processes for building plans, all contributing to the decline.

South Africa's construction and infrastructure sectors require substantial, long-lasting stimulus. Siseko Maposa, a director at Surgetower Associates, a management consultancy specializing in government, corporate, and foreign affairs, contemplates whether the new government can enact policies to promote sustainable infrastructure growth.

Maposa proposes that the new government should concentrate on striking a balance between public intervention and private involvement. This necessitates leadership that is constantly in tune with the economic climate. He emphasizes that a long-term boom can only be supported by a structure that balances public and private sector collaboration and builds investor confidence through stability and predictability.

Given the convergent center-right ideologies within the government, Maposa believes that the prospects for a public-private-led strategy appear promising. He suggests that this approach could lay the foundation for a sustainable infrastructure boom in South Africa.

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