South Africa’s energy system needs to be supported by effective policies, institutions, governance systems, regulation and where appropriate, competitive markets. By 2030, it is envisaged that effective management of water and the services derived from it will support a strong economy and a healthy environment. ( Log Out /  Seamless information infrastructure will be universally available and accessible and will meet the needs of citizens, business and the public sector, providing access to the creation and consumption of a wide range of converged services required for effective economic and social participation – at a cost and quality at least equal to South Africa’s main peers and competitors. South Africa is ranked 148th out of 180 countries in terms of water availability per capita, according to the 2012 World Water Development Report. This site uses cookies which are essential to make the site function effectively. Given the government's limited finances, private funding will need to be sourced for some of these investments. However, while there is an urgent need to address the issue of energy supply in South Africa, a lack of capacity in a number of other forms of economic infrastructure, from insufficient road, rail, port, communications and other logistical infrastructure, have also proven hugely damaging for the economy. As a manufacturing hub, it is the most industrialized, technologically advanced, and diversified economy on the African continent. Decisions must prioritise South Africa’s developmental considerations. With the plan we aim to transform our economic landscape while simultaneously creating significant numbers of new jobs, and strengthen the delivery of basic services. Economic Infrastructure South Africa has a relatively good core network of national economic infrastructure. Many South Africans in poor rural and peri-urban communities struggle to access basic social and economic infrastructure. By using our site you accept the terms of our cookie policy. Reduce water demand by an average 15% below baseline levels in urban areas by 2030. Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to email this to a friend (Opens in new window), Ensuring Environmental Sustainability and Equitable Transition to a Low Carbon Economy, An Integrated and Inclusive Rural Economy, Improving Education, Training and Innovation, Update on the National Planning Commission, Address by Deputy President Cyril Ramaphosa at the Youth Engagement Harare Library, Khayelitsha, Speech by Minister Jeff Radebe on the occasion for the HIV Counselling and Testing Campaign (Eskom’s Ingula Pumped Storage Scheme, Ladysmith), Workshop on the New Climate Economy Report: Better Growth, Better Climate Opening Remarks by Minister in the Presidency, Mr JT Radebe, Wits Club, Johannesburg, Media statement by Minister Radebe on the release of the Medium-Term Strategic Framework 2014 – 2019, Many households are too poor to pay for the cost of services, Some municipalities are poorly managed or have limited human and financial resources to deliver services, There is inadequate bulk infrastructure to supply all households with electricity and water in some communities, Unrestrained use of resources by some households leave others with nothing, Growth in coal exports must be balanced against domestic supply issues, Gas should be explored as an alternative to coal, There must be a growing diversity in the mix of energy sources and suppliers, Improved Municipal electricity-distribution, Electricity pricing and access need to accommodate the needs of the poor, The timing and desirability of nuclear power and new petrol refinery need to be considered. Growth in South Africa’s ICT sector has not brought affordable universal access to the full range of communication services. This economic infrastructure is a precondition for providing basic services such as electricity, water, sanitation, telecommunications and public transport, and it needs to be robust and extensive enough to meet industrial, commercial and household needs. In addition, the state must have adequate capacity and capability to formulate effective policies, support regulators, and respond to issues identified by regulators. Region: Free State Province, South Africa; Economic sector: Infrastructure Development; Project description: The Maluti-a-Phofung Special Economic Zone (SEZ) is located within the Maluti-a-Phofung Municipality. In such cases, effective economic regulation is essential to issue licences, ensure access to networks, set prices and establish technical and service standards that safeguard reliable and competitive prices for consumers, promote affordability, and ensure operators are efficient and financially viable. Lenders and investors, in turn, are revisiting their decision to invest in infrastructure projects that were deemed bankable prior to the pandemic,” the President said. However, he said the country’s financial system remained resilient despite the ongoing crisis. These and other energy build projects are expected to add almost 11 000MW or an additional 25% of power to the constrained current electricity grid of about 43 500MW. South Africa: State of Economic Infrastructure 2012 3 Foreword: DPME: Outcome 6 On 29 October 2010, the Delivery Agreement for Outcome 6 on Economic infrastructure was signed by the relevant sector Ministers. This in turn will facilitate the growth of key sectors of African economies. He also noted South Africa’s dwindling infrastructure investment over the years, which has caused great hardship for construction and related industries. President Cyril Ramaphosa spoke frankly about the country’s economy, which is expected to shrink by at least 7% compared to the anticipated 1% growth before the pandemic. ... Infrastructure and Economic Development in Sub-Saharan Africa. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Infrastructure investment, especially in South Africa, is currently at the forefront of policy and public debate. Future sectors flagged for high growth are expected to be trade, manufactu… Given that intra-Africa trade is only 12% of all trade on the continent, Africa needs to improve transport infrastructure in order to increase the volume of trade amongst African countries. An immediate policy goal is to ensure that the national ICT structures adequately support the needs of the economy, allowing for parties beyond the public sector to participate. The South African government must demonstrate that its new system of prioritising infrastructure projects is efficient and attractive enough to incentivise investment from the private sector, both domestic and foreign. Create a workable urban transit solution through: Increased investment in public transport and through resolving existing public transport issues, Devolving transport management to local authorities, Providing incentives for public transport use. The minister said government is also exploring the introduction of Green Infrastructure Bonds. South Africa is seeking investments from multilateral lenders, commercial banks and pension funds in what a senior ruling party official said will be a $20.5 billion infrastructure program. Until now, employment growth has been driven by business services, construction, retail, agro-processing and tourism sectors (Project Camissa Report 2019). Post was not sent - check your email addresses! Infrastructure Development and Economic Growth in South Africa: A Review of the Accumulated Evidence Johannes Fedderke and Rob Garlicky May 26, 2008 Abstract This paper provides a broad overview of the relationship between infrastructure and growth, focusing on the South African case. The economy of South Africa is the second largest in Africa. “In South Africa, infrastructure investment, together with the use of public land and buildings, is a critical lever to achieve spatial and economic justice by connecting our people, integrating our communities and bringing people closer to work opportunities.”. Water is a strategic resource critical for social and economic development and there is a growing concern about the potential impact of water-related risks. Ramaphosa underlined that the Coronavirus pandemic has made infrastructure investment even more compelling, and more urgent. Change ), You are commenting using your Google account. It heralded for the fi rst time in South Africa, a written promise of a Write CSS OR LESS and hit save. Current investment levels are insufficient and maintenance programmes are lagging behind. South Africa needs to focus on a number of strategic focus areas to reach its 2030 transportation goals: Information and Communication Infrastructure. South Africa has a relatively good core network of national economic infrastructure. There is some concern that the state does not have the institutional or financial capability to implement the investment plans needed to finance infrastructure to the required scale. Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. “Buyers of infrastructure services have delayed the procurement of new projects or cancelled projects. She said infrastructure is no longer talking about new construction but also the maintenance and upgrading of the existing infrastructure. Read more about:South AfricaEconomic transformation. Cape Town is a rapidly growing city in terms of infrastructure and accessibility. But the term ‘infrastructure’ has a variety of definitions and interpretations; the reason for the various definitions is related to infrastructure's various impacts and incidence. South Africa scores relatively well for the efficiency of their product markets and for having a large market size. The provision of superior quality infrastructure allows an economy to be more efficient, improves productivity, and raises long-term growth and living standards. Urgently plan to ensure protection of priority water resources. More effective administration is needed which requires clear and coherent legislation and policies based on strong research and development capabilities as well as the right technical tools. Sub-Saharan Africa ranks consistently at the bottom of all developing regions in terms of infrastructure performance, and an increasing number of observers point to deficient infrastructure as a major obstacle for growth and poverty reduction across the region. Effective transport systems are key to Africa’s economic integration. The industry took another beating during the pandemic, as operations ground to a halt during the lockdown. Source: SAnews.gov.za. ( Log Out /  Change ), You are commenting using your Facebook account. The government has courted foreign direct investment to lure investors into areas that need infrastructure, and foreign companies often build, own an… Op-Ed: Electricity is an essential service during COVID-19 crisis, South Africa: Wind farm receives locally manufactured transformer, African Utility Week takes a bow after two decades…, Natural gas is ideal to provide uninterrupted energy supply, Nigerian farm becomes country’s largest sun-powered poultry plant, Scaling mini-grids can support energy access in Africa, A conversation with Paul Vermeulen on batteries being part of the national grid, Eskom faces criminal charges over air pollution at Kendal Power Station, Partnership to install solar-powered desalination plants in Kenya. Change ), You are commenting using your Twitter account. For instance, the need to diversify South Africa’s energy mix to include more renewable energy sources, which tend to be variable in terms of production, should be balanced against the need to provide a reliable, more affordable electricity supply. Economic infrastructure typically exists not for its own sake, rather to support various kinds of economic activity. A single comprehensive strategy is needed to ensure the diffusion of ICTs in all areas of society and the economy. He said lower revenues, higher costs and non-payment has resulted in layoffs, financial losses and cash shortages. The state will oversee a transport system that takes into consideration the realities of transport in South Africa and thrives to serve the interests of society. As a sector, ICT may provide important direct opportunities for manufacturing, service provision and job creation, but their main contribution to economic development is to enhance communication and information flow that improve productivity and efficiency. Private sector investment will add a further 16… “A combination of policy measures has ensured that government continues to be able to fund itself through the domestic bond market at a reasonable cost, stabilising yields, injection of liquidity, reducing market volatility and alleviating disruptions to the flow of credit to the real sector”, Ramaphosa said. South Africa needs to maintain and expand its electricity, water, transport and telecommunications infrastructure in order to support economic growth and social development goals. Manage agricultural use better through reduced water demand and improved water-use efficiency. By 2030, ICT will underpin the development of a dynamic and commented information society and a vibrant knowledge economy that is more inclusive and prosperous. South Africa’s Treasury, in this financial year’s budget committed to spend more than R50bn to fund national and provincial economic infrastructure requirements. It asserts that South Africa’s economic growth story will rely on massive investment in infrastructure, including in energy, telecommunications, ports and rail. “In the short term, it creates jobs and economic activity as roads, bridges, hospitals, schools, power plants and much else is built. For South African economic growth to increase, the competitiveness of the economy needs to improve. The infrastructure that immediately surrounds this SEZ is in desperate need of upgrades and refurbishments. The South African government has placed infrastructure at the heart of the stimulus to realise economic recovery in the face of COVID-19. Providing suitable means for the safe, efficient, and cost-effective transport of people and goods is crucial. The air and rail networks are the largest on the continent, and the roads well maintained. Policymakers should focus on choosing or encouraging the right type of infrastructure at the right time. “Innovative construction methods, technologies and management systems are being explored, especially in relation to climate change and the green economy.”. As the 14th longest in the world, South Africa's rail infrastructure includes an extensive railroad network, connecting its Ports not only with destinations within the country, but also with the whole of Sub-Saharan Africa. The NDP envisages that by 2030 South Africa will have an energy sector that promotes economic growth and development, social equity and environmental sustainability. “A long period of recovery can be expected, even when we relax the interventions that we take to stem the transmission of the virus,” Ramaphosa acknowledged. Given the government’s limited finances, private funding will need to be sourced for some of these investments. Such mobility broadens social and economic access and alleviates poverty. Grid-scale battery storage – reality or not? Op-ed: Nuclear power must challenge public perception, Op-ed: Africa’s future is renewable energy, Ed’s note: Signing up for solar power and distributed energy resources, Digitisation is a ‘must’ to manage the network’s complexity, Ethiopia to conduct studies for Tulu Moye geothermal project. In an effort to boost the sluggish economy, government has announced that it will immediately prioritise infrastructure - through the establishment of the South Africa Infrastructure Fund. South Africa has a highly developed economy and advanced infrastructure. The following are common types of economic infrastructure. Policy planning and decision-making often requires trade-offs between competing national goals. This will require capacity-building in regulatory institutions. Babalwa is a social media enthusiast. She also contributes to sister publications; Smart Energy International and Power Engineering International. South Africa needs reliable, economical and smooth-flowing corridors linking its various modes of transport. South Africa has a relatively good core network of national economic infrastructure. The challenge is to maintain and expand its electricity, water, transport and communications infrastructure in order to support economic growth and social development goals. The economic decline has also been exacerbated by the downgrade of South Africa’s credit rating to sub-investment by all three credit rating agencies. Change ). Secondly, South Africa's stock of economic infrastructure has developed in phases. They employ about 220 000 workers. Sorry, your blog cannot share posts by email. “This requires that we not only push ahead to revive infrastructure investment but that we rapidly move to increase the scale of our ambitions.”. “Shovel-ready projects that have been fully developed for implementation will be the priority, ensuring the ground is broken as soon as possible. In May 2015 former President Jacob Zuma said the Presidential Infrastructure Coordinating Commission (PICC) – which is tasked with overseeing the coordination of projects – was monitoring more than 200 project clusters where construction was taking place. The price of services and equipment remains a significant barrier to expanding mobile-phone and fixed-line use with limited network competition further increasing costs. ICT is a critical enabler of economic activity in an increasingly network world. Parastatal companies also undertake infrastructure development in some sectors, while other initiatives include the government’s Expanded Public Works Programme, and public-private partnerships. Use spatial planning to create appropriate settlements closer to areas where people work. ( Log Out /  The challenge is to maintain and expand its electricity, water, transport and communications infrastructure in order to support economic growth and social development goals. The country’s network of roads and railways —the most extensive in Africa—handles most of the transportation demand, supplemented by air travel. Household census surveys in 1996 and 2010 measuring living conditions and access to infrastructure give a clear ... economic infrastructure and buildings and administration. Ports are characterised by high costs and substandard productivity relative to global benchmarks. Shift public thinking on public transport and greener energy sources. President Ramaphosa said as construction services are procured, government could assess project proposals on the employment impact to ensure the job creation impact is maximised. All South Africans will have affordable, reliable and sufficient safe water and hygienic sanitation. Strengthening and optimising freight corridors through expanding and improving the following corridors: Providing long-distance passenger transport options, Poor returns from the state’s investment in Telkom, Little evidence of an effective strategy to ensure that connectivity in South Africa keeps in line with its peers, Policy constraints, weaknesses in institutional arrangements, conflicting policies, regulatory failure and limited competition, The ability of the Independent Communications Authority of South Africa to enable a more open market, A national e-strategy that cuts across government departments and sectors, Stimulating sector growth and innovation by driving public and private ICT investment, especially in network upgrades and expansion and development of applications and local content, Reviewing market structure and analysing the benefits and costs of duplication versus sharing of infrastructure, given that the radio spectrum on which mobile networks depend is limited, Establishing a common carrier network, possibly by structurally separating Telkom’s backbone operations and its retail, Applying open-access policies to encourage sharing of certain elements of the backbone fibre network, without discouraging private long-term investment, Targeting public investment, possibly through public-private partnerships, Developing the specialised institutional capacity to ensure that the policy keeps up with the evolution of the sector and that regulation is effective, Effectively engaging various institutions, including global ICT governance agencies on issues of regional integration and harmonisation. To achieve its ICT goals, South Africa must have a coordinated, enabling ICT strategy and plan whose key aspects are: There is a clear and urgent need for a full policy review, which has not been done in the ICT sector since 1995. “At the policy level, we must do more to transform the construction industry, which is one of the least transformed industries in the country.”, Edited by ESI Africa. Key Policy Issues and Planning Priorities. These corridors are dominated by outdated, malfunction-prone railway technology and poor intermodal linkages. South Africa contains no navigable rivers; coastal shipping provides the only water transport. Infographic: Wind and sun power in South Africa By 2030 investments in the transport sector will bridge geographic divide affordably, support economic development and promote a low-carbon economy. © All content copyright 1997 - 2020 Clarion Energy, unless specified otherwise. CTRL + SPACE for auto-complete. The country's ports provide a natural stopover for shipping to and from Europe, the Americas, Asia, Australasia and both coasts of Africa. Babalwa has been writing for the publication for five years. Public Works and Infrastructure Minister Patricia de Lille said in this new normal, there is an even greater need to collaborate in the investment and implementation of infrastructure that will facilitate social and economic growth in a workable and purposeful way. “It gets construction and related services companies back to work, inducing them to hire staff and expand capacity.”. These are some of the bigger underlying causes: While some network industries lend themselves to competition, core components such as the electricity grid, gas and water pipelines, and railway lines tend to form natural monopolies. Economy and infrastructure Johannesburg is one of the world's leading financial centres and it is the economic and financial hub of South Africa, producing 16% of South Africa's gross domestic product, and accounts for 40% of Gauteng's economic activity. dramatically for the better in South Africa. The role and effectiveness of sector regulators needs to be reviewed as improved regulatory performance is vital for national development. Establish a national water-resources infrastructure agency to manage large regional investments. ( Log Out /  Thirdly, the need for investment in economic infrastructure never goes away. This was highlighted in the inaugural Sustainable Infrastructure Development Symposium of South Africa held on 23 June. The economy was ranked 50 th out of 142 countries in the 2012 World Competitiveness Rankings. However, non-tertiary Industries, like construction as well as food and beverage, have shown a decline since 2017 while the dominance of the services industry has grown (EGS – Baseline Statistics 2019). Infrastructure funding is largely provided by South Africa’s national government. South Africa has a modern and well-developed transport infrastructure. Competing options must be ranked using clear decision-making criteria, focusing on safety, affordability, and efficacy. Social and economic exclusion caused by apartheid planning is evident in the long distances that many travel from where they live to where they work. National Infrastructure Plan The South African Government adopted a National Infrastructure Plan in 2012. South Africa - Infrastructure, power, and communications Compared to the rest of Africa, … President Cyril Ramaphosa believes that infrastructure should be the “flywheel” of South Africa’s economic recovery from the growth- and job-destroying Covid-19 crisis and announced on Tuesday that infrastructure would, thus, be placed at the centre of South Africa’s postpandemic stimulus efforts. South Africa is an upper-middle-income economy – one of only eight such countries in Africa. A systematic approach to transport, which puts focus on the total transport network, will improve transport efficiency and accessibility while reducing the overall environmental, social and economic cost. He told delegates that infrastructure investment provides both short- and long-term economic benefits. The plan also supports the integration of African economies. As a water-scarce country, greater attention must be paid to water management and use. In the next 5 years, South Africa needs to develop a more comprehensive and integrated e-strategy that reflects the cross-cutting nature of ICT. “In South Africa, infrastructure investment, together with the use of public land and buildings, is a critical lever to achieve spatial and economic justice by connecting our people, integrating our communities and bringing people closer to work opportunities.” South Africa is coal-dependent is consequently a significant emitter of carbon dioxide which contributes to climate change. Infrastructure investment is a critical driver of future growth of the South African economy. Economic infrastructure are basic services that represent a foundational tool for the economy of a nation, region or city.Infrastructure can include physical structures, systems, institutions, services and facilities. activities and services which support operation and development of other sectors of the economy Management of water resources approach must be reviewed regularly to ensure that priority areas for intervention are identified and implementation is monitored. Moreover, South African should have adequate supply security in electricity and in liquid fuels, such that economic activity, transport and welfare are not disturbed. “Europeans built infrastructure in Africa at the turn of the century, purportedly also for local economic development, but in essence the projects were used for natural resource extraction.

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