Infrastructure solutions set out viable path to economic growth – IRR report

Comprehensive infrastructure solutions that lay out a viable path to economic growth in South Africa are at the core of the latest Blueprint for Growth paper published by the Institute of Race Relations (IRR).

Reinforcing South Africa’s growth through infrastructure explains why infrastructure matters, what the current state of infrastructure is, and how to turn it around.

In a webinar on the paper today, its author, IRR Researcher Anlu Keeve, said: “Infrastructure, which forms the backbone that sustains economic activities, facilitates trade and multiplies productivity. Without well-maintained roads, rail and ports, and stable energy, communications and water supply networks, achieving and maintaining economic growth will be an uphill battle.”

Keeve highlighted the importance of Gross Fixed Capital Formation (GFCF) in providing “a sense of [investors’] long-term vote of confidence in the country. When GFCF rises, it means firms and governments are willing to bet on the future. When it falls, it means the future looks too uncertain or too risky.”

South Africa’s GFCF number has been going down since 2008, when it reached its post-1994 peak rate of almost 22%, and is presently just 13.9%.

To reverse decades of decline, Keeve argues, South Africa needs to take immediate practical steps. This must include a recognition that “(f)ixing South Africa’s water, electricity, rail, road, and port infrastructure must not be treated as merely a technical task that requires more money and expertise. It will require changing the rules that govern how decisions are made, who makes them, and on what grounds. Without that, no amount of capital or technical support will be enough.”

Keeve says: “If the GNU truly intends to strengthen social cohesion – and with it, raise the standard of living of all South Africans – it must place economic growth at the centre of its agenda. That means making deliberate policy choices that put South Africa’s infrastructure first.

“By following some of the recommendations listed [in the report], South Africa’s infrastructure networks can be rehabilitated. The entire country will shift onto a higher growth track, with incalculable benefits for the people of South Africa and the broader region – it is time to build the future, not just talk about it.”

Read the report – and watch the webinar – here.  

Media contact: Anlu Keeve, IRR researcher Tel: 071 929 9516 Email: anlu@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za