The South African government will spend more than R1 trillion over the next three years on public infrastructure in a show of government’s commitment to driving economic growth.
This is according to Minister of Finance Enoch Godongwana who delivered the 2025 Budget speech in Parliament on Wednesday.
“[Infrastructure] is a key pillar of our growth strategy. It is the bedrock for economic development, a key source of jobs, and an avenue to scale-up service delivery.
“This budget reflects that understanding. Allocations towards capital payments are the fastest growing area of spending by economic classification. Public infrastructure spending over the next three years will amount to more than R1 trillion,” Godongwana said.
Current infrastructure focus is geared towards:
• R402 billion on roads infrastructure
• R219.2 billion on energy infrastructure
• R156.3 billion on water and sanitation infrastructure
The Minister highlighted some of the key projects that will be underway.
“In transport, the South African National Roads Agency will spend R100 billion over the medium term to keep the national road network in good condition. Provincial roads departments will reseal over 16 000 lane-kilometres of roads in their areas of authority.
“The Passenger Rail Agency of South Africa is making steady progress to rebuild infrastructure to provide affordable commuter rail services.
“In water, we are investing in several large-scale dam projects that are ramping up or entering construction. The Mkhomazi Project is expected to commence construction in November 2027, transferring water to the Mngeni Water Supply System. This will increase the total capacity of the system to 5 million households in eThekwini and 4 district municipalities in KwaZulu Natal,” Godongwana said.
In the 2025 Budget Review, National Treasury explained that investment in economic infrastructure – mainly by state owned entities – accounts for some 81.5% of the medium-term estimate.
“These funds are used to expand power-generation capacity, upgrade and expand the transport network and improve sanitation and water services. Social services infrastructure accounts for 15.5% of the total, with the two largest sectors, health and education, contributing 4.4 % and 5.5% respectively,” the review read.
Public-Private Partnerships
The department explained that infrastructure reforms are “underpinned by a commitment to significantly increase partnerships with the private sector”.
Some of these measures and reforms include:
• From June 2025, projects below a total value of R2 billion will no longer have to clear onerous approval processes intended for large projects before proceeding.
• A clear framework is being established to receive and process unsolicited PPP proposals or bids from the private sector.
• New legislative amendments and regulations for municipal PPPs will also be introduced in 2025
• Revised manuals and guidelines on PPPs are being produced and will be made available to the public
“During 2025/26, a single structure overseen by the National Treasury will be established to coordinate state participation in project preparation and planning, public-private partnerships (PPPs), funding and credit guarantees.
“It will be established by merging two units currently in the Government Technical Advisory Centre that coordinate PPPs and capital appraisals with the Infrastructure Fund in the Development Bank of Southern Africa,” Treasury said. – SAnews.gov.za
