South Africa’s infrastructure ambitions are not constrained by a lack of capital; rather, they are adversely affected by a lack of bankable opportunities.
As we reach the midway point of Africa Month, it is perhaps appropriate to reflect on the direction of investment in infrastructure, specifically in South Africa.
Why infrastructure, you may ask? Because, as President Cyril Ramaphosa noted at the recent South Africa Infrastructure Investment Summit, “infrastructure is the next great frontier of investment”. I had the good fortune of participating in the summit as part of a seminal panel discussion examining the importance of partnerships in solving funding blockages.
President Ramaphosa also noted at the summit that “private capital and expertise is critical to Africa’s infrastructure progress”. We share this assessment wholeheartedly.
According to a joint World Bank and Development Bank of Southern Africa report on infrastructure funding, South Africa requires R13 trillion to modernise its transport and logistics systems. This is an existential challenge that cannot be met by the public sector alone, as the president and members of his cabinet have widely acknowledged.
In approaching this mammoth task, government rhetoric has been matched by important steps to reform key sectors of the economy.
Policy initiatives such as Operation Vulindlela, the National Logistics Crisis Committee (NLCC) and the forward-thinking Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) have undoubtedly accelerated progress and added substantial momentum to support the government’s infrastructure investment ambitions.
These initiatives have collectively increased traction in key sectors. Much has been done, but more still needs to be achieved.
The country has set an ambitious infrastructure investment target of R3 trillion, or US$180 billion, over the next five years, as announced at the summit.
This sounds daunting, but South Africa’s infrastructure ambitions are not constrained by a lack of capital; they are adversely affected by a lack of bankable opportunities. This distinction is critical.
For years, the dominant narrative has been that unlocking infrastructure development requires more funding. But, from a private sector perspective, capital is available and actively seeking long-term, stable investment opportunities.
The real challenge lies in creating the conditions that make infrastructure projects investable at scale.
Nowhere is this more evident than in the transport sector, which sits at the heart of economic growth, trade competitiveness and industrial development.
Encouragingly, recent reforms signal a shift in approach from state-led delivery towards the creation of a regulated investment ecosystem that recognises the role of different private sector players.
However, to translate reform momentum into tangible investment flows, three priorities must be addressed urgently: regulatory certainty, credible concession frameworks and a systemic focus on bankability.
Regulatory certainty is essential
The single most important factor in unlocking private sector participation is regulatory certainty.
Infrastructure projects, particularly in transport, require long-term capital commitments. Investors need certainty around pricing, access, risk allocation and governance to assess risk and allocate capital effectively.
Regulatory certainty is not merely a technical requirement; it is a signal of credibility. It tells investors that the rules of the game are clear, consistent and enforceable. Without it, even the most well-intentioned infrastructure strategies will struggle to gain traction.
The appointment of the Economic Transport Regulator is a critical reform, as independent oversight and enforcement of regulations will give investors greater confidence to deploy capital.
Bankability requires a systemic approach
Beyond regulation and concessions, the broader concept of bankability must be addressed at a systemic level. Infrastructure investment depends on the strength of the entire project ecosystem, from preparation to financing and execution.
Ultimately, strengthening bankability also means recognising infrastructure as an interconnected system, given the critical intermodal dependencies.
From state asset to investment platform
South Africa stands at an important inflection point. The shift underway — from viewing infrastructure as a purely state-delivered public good to treating it as a regulated investment platform — is both necessary and overdue.
If government can sustain policy consistency, deepen reforms and build execution credibility, the transport sector could become one of the most compelling infrastructure investment opportunities on the continent.
There is as much as a four-times multiplier effect in the broader economy for every rand invested in network industry infrastructure. The prize — a more competitive economy, improved trade flows and sustained long-term growth — is significant. Achieving it at scale requires, among other things, a shift in mindset. The question is no longer whether capital is available. It is whether the system is ready to absorb it.
Fixing bankability is not merely a technical exercise; it is the gateway to unlocking South Africa’s infrastructure future. For our part, Standard Bank has a storied history of working closely with government to deliver game-changing infrastructure projects. Supporting viable, bankable projects from conception to shovel-ready status, with a keen eye on the future, is in our DNA.
It is a future in which we are all deeply invested. The country’s success is our success. With this in mind, we are obliged to do all we can to ensure that we invest wisely in building a country future generations can be proud of.
Stephen Barnes is the head of Standard Bank Corporate and Investment Banking, South Africa
