Business Leadership SA has launched a report on how to boost infrastructure investment to drive the economic recovery. BLSA commissioned the research to support government’s efforts to drive infrastructure investment. While business, government and social partners have agreed that greater investment is important, the reality is that over the past five years investment volumes have been falling further from the National Development Plan’s target of 30% of GDP per year. The report identifies several factors that have contributed to this trend, including skills shortages, weak balance sheets of SOEs, excess capacity in the private sector, complex procurement regulation and poor investment-driving policies. The 2021 Budget, which came after the report was finalised, showed that public sector expenditure in 2020 also fell far short of budgeted amounts.
The report, drawn up by Intellidex, recommends several interventions to improve the volumes of infrastructure investment, focused on mobilising private sector funding and supporting public sector capacity. It calls for structural reforms in energy, mining and spectrum availability to rapidly boost private sector investment, which can be achieved at no cost to the public purse. It also calls for greater use of public-private partnerships (PPPs) to bring together the strengths of the public and private sectors to deliver maximum value for investment to the public. It calls for reforms to the PPP framework with complexity aligned to project size and risks, and for PPPs to be used more by SOEs to overcome balance sheet constraints to funding investment. It also recommends reforms to the on-budget procurement framework to reduce the skills constraint faced by public institutions in procuring infrastructure. Business is also focused on contributing skills to bridge public sector capacity constraints though initiatives such as Tamdev, a National Business Initiative project to strengthen the state’s capacity to improve service delivery and create jobs.
Download the full report here
Download a one page summary of the report here
Download the presentation slides here
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