South African infrastructure development: potential partners, obstacles, and growth prospects

Abstract

South Africa’s persistent problems of poverty, unemployment and inequality are legacies of colonialism and apartheid that entrenched racially segregated infrastructure development.Despite over three decades of democracy, these structural problems persist compelling the government to place mission-critical infrastructure (energy, ICT, freight transport and water infrastructure) at the centre of its economic recovery strategy. This study investigates how mission-critical infrastructure investments could stimulate economic growth in SA. In addition, given the complex geopolitical and global macroeconomic environment, it reviews SA’s potential partners for long-term infrastructure investments, assessing the risks and growth prospects. Finally, an overview of SA’s infrastructure financing options is conducted, with a specific focus on private investment on infrastructure development. The methodology approach for this study is quantitative, augmented by a comprehensive desktop literature search on the geopolitical analysis of global infrastructure investments and South African infrastructure financing. For the quantitative aspects of the research, quarterly data was used for the period between 2000 and 2023, analysing the relationship between mission-critical infrastructure and growth in SA in both the short and long term. The literature search assessed the opportunities and risks in infrastructure development in SA within a complex macroeconomic and geopolitical environment.