SONA 2025: A closer look at the R940 billion infrastructure commitment
More details on the R940 billion to be spent on infrastructure over the next three years will likely be known when Finance Minister Enoch Godongwana delivers his Budget Speech later this month.
During his State of the Nation Address (SONA) on Thursday evening, among several components of infrastructure, President Cyril Ramaphosa announced that the government will spend more than R940 billion on infrastructure over the next three years. This includes R375 billion in spending by state-owned companies.
He said the funding will revitalise roads and bridges, build dams and waterways, modernise the country’s ports and airports, and power the economy.
He also said that through the Infrastructure Fund, 12 blended finance projects worth nearly R38 billion were approved in the last year. These are projects in water and sanitation, student accommodation, transport, health, and energy.
Speaking on governance, Dr Mlungisi Phakathi, said we will have to wait to hear what Minister Godongwana says about where the money will come from or what kind of budget the State has.
Phakathi said sometimes politicians speak to please the crowd for applause, just like Ramaphosa got a lot of applause on Thursday from the crowd and the parliamentarians.
“We will see when Minister Godongwana speaks about how much money is allocated for each province, how much money is allocated for each national department and how much money is allocated for the local municipalities,” Phakathi said.
He further said that it is important to spend money on infrastructure but Ramaphosa also spoke about State Capture and other kinds of capture.
“So we must be careful when we use money, making sure that the people who are paid to do a job have a proper plan, and they implement that plan, and then they stick to the timelines that they’ve provided,” Phakathi said.
“So obviously, it’s important to know when the project starts and when the project will be completed, bearing in mind the unforeseen circumstances that might cause a halt in development.”
Phakathi added that local municipalities, particularly the municipalities which still need a lot of infrastructure, must apply if it comes in the form of a grant.
Momentum Group Youth Employment Portfolio head Nkosinathi Mahlangu said the R940 billion infrastructure investment is a major opportunity, but it must be ring-fenced to benefit unemployed South Africans, with at least a 60/40 split prioritising youth employment.
Consult by Momentum wealth manager Jurgen Eckmann said hope must be backed by action and action must be measured in tangible results.
“When we start seeing meaningful shifts in unemployment rates, GDP growth and fiscal sustainability, we’ll know the plans are working. Until then, cautious financial planning remains essential to navigate the road ahead,” Eckmann said.
Meanwhile, Public Works and Infrastructure Minister Dean Macpherson welcomed Ramaphosa’s commitments during his SONA, indicating that it will realise efforts to turn South Africa into a construction site.
Macpherson stated that the president’s announcements align with efforts made over the past seven months to attract additional infrastructure financing, get more shovels into the ground, and revitalise small harbours to benefit the communities in which they are located.
“We welcome the president’s public support for the work we have been doing in the Department of Public Works and Infrastructure to turn South Africa into a construction site, which will undoubtedly help us grow the economy and create much-needed jobs.
“His support for the work we have done with the National Treasury to reform PPP (Public-Private Partnership) regulations will go a long way in attracting additional infrastructure financing, in line with our commitment to secure an additional R100 billion in infrastructure investment over the next four years,” Macpherson said.
“Furthermore, the president’s endorsement of our efforts to revitalise small harbours… will ensure that these harbours meaningfully contribute to the communities in which they are located. This will help stimulate local economies and create jobs.”
Macpherson added that the department remains committed to meaningfully contributing to Ramaphosa’s vision of increasing South Africa’s economic growth to above 3%, leading to job creation.
thobeka.ngema@inl.co.za