South Africa: Tide may be turning for private-sector investment

8 March 2012

Business Day - March 8, 2012

ELLEN HAGERMAN: Tide may be turning for private-sector investment

Whereas political announcements may bode well for progress, what the private sector will still be looking for is a reassurance that the government is committed to developing and maintaining a friendly investment climate over the longer haul

THE government has made infrastructure pivotal in its economic plan. Over the next three years, the state plans to spend R845bn on infrastructure, with about two-thirds of that on energy, transport and logistics.

In his recent budget speech, Finance Minister Pravin Gordhan was careful to acknowledge the role of the private sector and he called for a "more effective and dynamic partnership" with the private sector and civil society.

While a World Bank study has determined that public investment is the principal source of funding for infrastructure investment, governments such as SA’s will need to develop a better understanding of how to engage with the private sector either to fund infrastructure directly or to partner in the financing of major core infrastructure projects, such as road, rail and power.

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