South Africa’s Construction Booms on $265B Infrastructure Push

AFRICAN BUSINESS AND ECONOMYJanuary 20, 2025 at 11:20 AM UTC

TLDR

Construction activity is surging across South Africa as President Cyril Ramaphosa’s multi-billion-rand infrastructure overhaul gains momentum
The strategy aims to inject $88 billion in public sector funds by 2030, with private investors contributing $177 billion
The construction sector is already feeling the impact, adding 176,000 jobs in Q3 2024

Construction activity is surging across South Africa as President Cyril Ramaphosa’s multi-billion-rand infrastructure overhaul gains momentum. Workers are busy upgrading key corridors, including the Gauteng-Durban route, as part of the plan to modernize aging infrastructure and boost the economy.

The strategy aims to inject $88 billion in public sector funds by 2030, with private investors contributing $177 billion. The construction sector is already feeling the impact, adding 176,000 jobs in Q3 2024, bringing total employment to 1.3 million, and lifting the national employment rate to 33.5%.

While optimism is high, challenges remain. Red tape slows public-private partnerships, and criminal extortion has disrupted $3.4 billion in projects since 2019.

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Key Takeaways

South Africa’s infrastructure investment gap, estimated at 4-6 trillion rand by 2030, underscores the need for greater spending. Currently, infrastructure expenditure is 15% of GDP, lower than the 25% seen among peers. Despite delays and criminal threats, analysts like Tana Mongwe of Old Mutual see potential. Record order books reflect the growing confidence in the sector. Addressing inefficiencies in procurement, expediting approvals, and tackling criminal disruptions could further unlock economic growth and close the infrastructure gap.

South Africa

Infrastructure

Construction

Economy

Finance