BLSA Chair, Nyembezi on how to unblock infrastructure investment bottlenecks

Infrastructure investment in South Africa has been on a decline for the past six years, dropping from 20.3% of GDP in 2015 to 17.9% in 2019. This fall is alarming, especially since it falls far below the National Development Plan's target of 30% of GDP. To address this issue, Business Leadership South Africa (BLSA) released a report detailing potential solutions to boost infrastructure investments in the country. In a recent TV news interview on CNBC Africa, Nonkululeko Nyembezi, Chair at BLSA, provided insights on the report and the challenges hindering infrastructure development in the nation. Nyembezi highlighted several key factors contributing to the infrastructure investment bottlenecks. One major issue is the fiscal position of the government, which hinders its ability to fund large infrastructure projects. Additionally, state-owned enterprises (SOEs), crucial for economic infrastructure, have reached a point where they are unable to take on more debt to finance these projects. Moreover, a significant skills drain has been observed in local authorities responsible for delivering social infrastructure, further hampering progress. The stagnant economy and the impact of COVID-19 have compounded these challenges, making it difficult to drive infrastructure development effectively. Despite government initiatives like Operation Vulindlela and the establishment of the infrastructure and investment office at the presidency, there is still a lack of coordination among various stakeholders involved in infrastructure projects. Nyembezi emphasized the importance of consolidating infrastructure players to enhance coordination and efficiency in project delivery. She praised the Wollingella initiative for its efforts to identify and address blockages in infrastructure development. Another critical aspect discussed was the impact of fluid policy on infrastructure investments. Nyembezi acknowledged the need for a stable and conducive policy framework to attract private sector investments. While progress has been made in areas like mining, property rights, and spectrum allocation, there is room for improvement in providing clarity and certainty for long-term infrastructure projects. Regarding the national vaccination drive, Nyembezi highlighted the private sector's role in supporting the rollout. While BLSA is not directly involved in vaccine procurement, it aims to assist in distribution, storage, and other logistical aspects to expedite the vaccination process. Nyembezi stressed the importance of addressing the economic and social impacts of the pandemic beyond the vaccination drive. Looking ahead, BLSA aims to engage with all relevant stakeholders identified in the report to foster collaboration and implement the suggested solutions. Nyembezi emphasized that infrastructure development is a long-term endeavor requiring sustained efforts from both the public and private sectors. By working together and aligning interests, South Africa can overcome its infrastructure investment challenges and pave the way for sustainable economic growth.