Some policy proposals for future infrastructure investment in South Africa

The South African government has begun to ramp up economic infrastructure investment. This is an important policy shift and in line with the government’s aim of increasing economic growth to 6% and halving poverty by 2014. It follows that we are left with the question: What are the most important areas for infrastructure investment, both type and location? This paper provides a short review of the essential characteristics of infrastructure as well as a guide to the past and present features of South Africa’s infrastructure stock. Three main policy proposals are made: provide basic infrastructure to all, improve the quality of existing infrastructure, and provide transnational infrastructure. Since 1994, the government has increased the access to basic services of a large part of the population, although there is still room for improvement. However, a lack of institutional and managerial capacity at the local level seems to be a constraint on delivering basic infrastructure services. Furthermore, comparative analysis reveals that the country’s infrastructure quality lag those of other countries. However, politicians may prefer to provide new infrastructure rather than improving existing infrastructure, as it provides a wider support base. This could lead to significant inefficiencies, especially with the politically sensitive 2010 Soccer World Cup approaching. Regional integration is an important long-term requirement to ensure sustainable economic growth and prosperity for the countries of southern Africa. Currently, South Africa is poorly integrated into the rest of Africa. The current transnational institutions – SACU, SADC, NEPAD – do not have the institutional and financial capacity to provide such infrastructure. A strong emphasis on providing transnational infrastructure – specifically transport, energy and ICT infrastructure – is proposed.