Construction World March 2021

COMMENT

Industry Insight is a company that was established out of an industry requirement for a holistic approach to market intelligence in the South African construction market. It recently stated that the R340-billion infrastructure pipeline will not be a 'miracle cure' for the country’s ailing economy unless the private sector’s confidence levels are restored.

I n essence, the company says that Government alone – despite the massive pipeline that it announced for various infrastructure sectors – cannot resurrect the industry unless it is assisted by the private sector. However, this sector has little to no confidence in government after three years of empty promises or it doing exactly the Industry Insight says the private sector is no longer buying into Government’s (up to now) largely empty promises because “the country is still yet to see any meaningful economic reform and progress of reforming Eskom, corruption,” etc. As such, President Ramaphosa’s comment in his State of the Nation Address about Government’s infrastructure expenditure plan as part of opposite of restoring faith. Miracle cure not so miraculous

its COVID-19 economic recovery plan, has been largely met with extreme scepticism. The so-called ‘miracle cure’ will be no such thing unless faith can be restored. But, paralysis still exists Industry Insight says that implementation paralysis persists within broader reforms. The infrastructure rollout relies on private sector participation, contributions from the fiscus, and the R100-billion Infrastructure Fund. Getting this mix right will ensure its success … while getting it wrong, will lead to failure. The country can ill afford the latter – now more than ever as the dire situation was further exacerbated by the COVID-19 pandemic. Infrastructure development is a massive contributor to the economy and its success will lead to job creation, and to sustainable economic growth. It is therefore a vital pillar for economic prosperity.

This should spur on all parties involved, but government’s continued bailout of ‘bankrupt’ SOEs (for all intents and purposes) which leaves less funding available for far more productive sectors of the economy (such as infrastructure), has led to confidence in government being at an all-time low. At a time when investment by Government has been adversely affected by a weakened fiscus, structural imbalances and higher debt-related expenditure, such low confidence may be problematic for the country achieving its development goals.

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CONSTRUCTION WORLD MARCH 2021