South Africa Says Lenders Commit $21 Billion to Building Projects
Banks, development finance institutions and multilateral organizations have committed 340 billion rand ($21 billion) to infrastructure projects in South Africa that could create 290,000 jobs, the government said.
The projects range from water supply to housing, energy, agriculture and roads. They were named in a July 24 government gazette, paving the way for the beginning of private investment in a 2.3 trillion rand program over the next decade.
Infrastructure investment has been identified by South Africa’s President Cyril Ramaphosa as a key plank in his bid to revive a stagnant economy that’s been further damaged by the coronavirus pandemic. While the state has traditionally funded most infrastructure in South Africa, surging debt has seen the government turn to private capital.
The projects need sovereign guarantees and an increase in debt limits, Kgosientsho Ramokgopa, the head of infrastructure investment in the presidency, said at a press conference today.
For more on the initial announcement, click here
Still, the commitments are a step forward in attracting investment into the country, which faces infrastructure deficits ranging from piped water to housing and power plants.
Of the 276 projects being considered by Ramokgopa’s department, the initial list totaled 50 with an additional 12 “special projects.” The projects are “shovel ready,” he said, with work likely to begin within three months.
“We will come with the next wave of projects,” he said. “The state needs to reciprocate by providing those guarantees.”
Some of the projects, such as the next stage of the Lesotho Highlands Water Project, are already in process. Ramokgopa was not clear on whether the total investment amount included previously announced expenditure.
“What we need are projects that are financed independently by private investors who then earn a return through operating the projects,” said Theobald. “Those are genuinely fiscal neutral and growth positive.”
Ramokgopa did say one project to build 45,000 housing units was completely privately funded.
The commitments are as follows:
- Transport: 47 billion rand, creating 50,000 jobs
- Water and sanitation: 106 billion rand, creating 25,000 jobs
- Housing: 138 billion rand, creating 190,000 jobs
- Agriculture: 7 billion rand and 4,000 jobs
- Digital: 4 billion rand and 700 jobs
- Energy: 58 billion rand, creating 6,000 jobs
Reported by EIRNS, researchers at South Africa’s National Income Dynamics Study (NIDS) group released a Coronavirus Rapid Mobile Survey (CRAM) on Wednesday, July 15, which provided a bleak picture of the reality currently facing that nation under lock down, conditions which are representative of much of Africa and the Global South.
Conducted over a two-month period during May and June, the extensive (20-minute) survey was conducted by phone this year, with 30 researchers contacting over 7,000 people/homes. Of the hundreds of questions asked — with conversations getting personal to the point of provoking tears — the final report breaks the responses into three categories: Employment, Hunger, and Health.
- On employment: 30% of income earners who had a job in February did not earn an income in April 2020 (the month South Africa’s hard lock down started and before relief efforts kicked in). As could be expected, job losses were highest in already-disadvantaged areas which could least afford it.
- On hunger: 47% of respondents reported that their household ran out of money to buy food in April 2020. 1 in 5 respondents told researchers that someone in their household had gone hungry in the last seven days, and 1 in 7 respondents reported that a child had gone hungry in the last seven days. In households with children, 8% reported “frequent” child hunger (3 or more days in the last 7 days) in their household, and 1 in 25 (4%) reported “perpetual” hunger (almost every day or every day), with cases of “food shielding” (adults not eating so their children could survive), evidenced by “adult” hunger surpassing child hunger by almost 8%.
- On health: 78% couldn’t (or wouldn’t, whether out of fear or poverty) see a doctor at least once during May or June, while 23% reported they were unable to access needed medications. The situation in South Africa is compounded by the unaddressed crisis of AIDS, with victims being unable to access critical care because of COVID-19 overload, a condition which could only be worse if the patient were pregnant.
While the authors do not note it, the survey is the first known to bring together these three aspects of the crisis, providing an accurate physical-economic picture of this harsh reality.