South Africa’s government said funders have committed tens of billions of rand to a new infrastructure investment drive aimed at reviving an economy that’s in freefall because of the coronavirus pandemic.
Gross domestic product is expected to contract at least 7% this year, and the advent of the disease has made the need for the investment all the more urgent, President Cyril Ramaphosa told a conference in Pretoria, where the infrastructure plan was unveiled.
The plan has won backing from development finance institutions and ground needs to be broken as soon as possible, he said.
“We have placed infrastructure at the centre of the stimulus our economy needs to achieve a sustainable recovery,” he said.
“In the long run, infrastructure investment increases the capacity of the economy, reducing the cost of transport and the capacity and reliability of key services like electricity and municipal services.”
The government imposed one of the world’s most severe lockdowns in late March to slow the spread of the coronavirus.
The curbs that shuttered most businesses have since been eased but bankruptcies and job losses have continued unabated, while confirmed infections have skyrocketed past the 100,000 mark.
Ramaphosa previously announced a R500 billion ($29 billion) package to shore up the economy, but has said that won’t be enough to reignite economic growth.
The government will showcase about 280 projects at the conference, 88 of which are already considered bankable, and plans to tap multiple sources to fund them, Kgosientsho Ramokgopa, head of the presidency’s investment and infrastructure office, told the gathering, which is being attended by 681 delegates.
Public Works Minister Patricia de Lille said the program will offer opportunities to invest in green technology and confirmed that the government was considering introducing green infrastructure bonds.
The New Development Bank, which was established by the governments of Brazil, Russia, India, China and South Africa, will make funding available and is keen to invest in green infrastructure bonds, according to Leslie Maasdorp, one of the lender’s vice presidents.
The bank has registered a bond sale plan with the Johannesburg Stock Exchange that will raise as much as R10 billion, with the first phase to be completed within six to nine months, he said.
Officials from the World Bank, Development Bank of South Africa and African Development bank also pledged support for the infrastructure drive.