President Cyril Ramaphosa says the decline in infrastructure spending has led to the deterioration of municipal infrastructural projects such as water treatment plants and roads.
The President was making opening remarks at the start of an extraordinary meeting with leaders in the financial sector at Tuynhuys in Cape Town.
Ramaphosa says infrastructure spending has decreased to about 13% of total spending over the recent years.
“In recent years, the government has witnessed the accelerated deterioration of some of its most important assets required to improve the quality of life of people. There has been huge neglect as well in this regard and rapid deterioration of municipal infrastructure.”
The President and leaders in the financial sector are discussing how to address problems relating to infrastructure.
Ramaphosa told business leaders that infrastructural development was critical to the future economic growth of the country. He’s also reaffirmed the government’s commitment to removing policy and other regulatory bottlenecks.
Ramaphosa calls on the private sector to invest in infrastructure projects.
The president says public infrastructure spending has been declining in recent years to about 13 percent of total spending. As a result of this, projects such as water treatment plants and roads at the local sphere of government have deteriorated due to neglect.
He says, “Multi-lateral development banks development finance institutions and the private sector all have a critical role in financing and implementation of this investment in recent years government has witnessed the accelerated deterioration of some of its most important assets required to improve the quality of life of people there has been huge neglect as well in this regard and rapid deterioration of municipal infrastructure.”
Ramaphosa says the engagement with the financial sector is aimed at coming up with a comprehensive Infrastructure Plan to address these problems.
“It should also outline a public-private partnership framework and remove policy bottlenecks in engaging with the private sector. It should strengthen the preparation of bankable projects but it should also be able to mobilise long term finance to implement projects through comprehensive contract management towards achieving a sustainable infrastructure delivery…” says Ramaphosa.
He also reaffirmed his government’s commitment to making it easy to do business in South Africa.
“We need to initiate policy and regulatory reforms our public sector policy and the regulatory universe is among some of the most elaborate and prohibiting in the world. It has the unintended consequence of delaying and derailing at a cost to the economy.”
He says he is confident that the envisaged infrastructural projects can be delivered if the private sector works with the government.
Acting on the commitments made in the #SONA2020, the President has invited public sector executives, financiers incl. multilateral development banks, development finance institutions, business & infrastructure industry players to discuss expansion of public sector infrastructure. pic.twitter.com/VDUEFxGUSR
— PresidencyZA (@PresidencyZA) February 18, 2020