Government kickstarts the National Infrastructure Fund

Government departments have signed a memorandum of agreement that will kickstart work on the National Infrastructure Fund.

An allocation of  R100-billion has been earmarked for the fund over a period of 10 years, with R10-billion already made available by the national treasury in the current medium-term expenditure framework baseline. 

The memorandum was signed by Infrastructure in South Africa, an entity of the department of public works and infrastructure; the national treasury; and the Development Bank of Southern Africa.

A joint statement released by the three government departments, said that the fund: “is meant to fundamentally transform the state’s approach to the financing of infrastructure projects, reduce the current fragmentation of infrastructure spend, and thereby ensure more efficient and effective use of resources and improve the speed and quality of delivery”.

The statement also said that, given the devastating effects of Covid-19, and the fact that limited government finances have been worsened by the pandemic, the strategic importance of infrastructure as “a lever and stimulus for economic recovery and growth has come to the fore”.


National treasury director-general Dondo Mogajane said infrastructure has a huge potential to boost economic growth and create much-needed jobs.

He added that the government will work with the private sector to ensure that good projects are funded. He explained that good projects are the kind that have the capacity to create jobs and get the economy out of its slump.

Last month, the South African Reserve Bank forecast that the economy will contract 7% in 2020. In addition, the country’s unemployment rate has soared to 30% and is expected to reach 50%, given the deep economic depression caused by Covid-19. 

Development Bank of Southern Africa chief executive Patrick Dlamini said that now that the signing has happened, the real job begins — and the bank is ready.
“We want to make sure that we do not compromise this project. We want to make sure we pull all stops to make sure that it happens”, said Dlamini, adding that the bank wants it to take place in a manner that reflects transparency, responsibility, cost-effectiveness and accountability. 

“We cannot come here lying to each other when we are actually going to be giving things to our buddies and our friends. We want this fund to work for all people of South Africa,” said Dlamini. 

Treasury’s Mogajane said measures have been put in place to make sure that corruption does not take place. He said there are systems, mechanisms and procurement roles in place that the treasury will be strengthening to make sure graft does not occur. 

“Our process should be transparent, fair and competitive, and we must get the best value for the government”, Mogajane said. 

Mogajane said there should be a tender and adjudication process that is flawless. He said the treasury will not accept corrupt parties being given access to the funding. 

We will ensure that what we have seen in the 2010 infrastructure rollout does not happen, he said, referring to the allegations of rampant corruption and collusion, Mogajane said. 

The National Infrastructure Fund was announced by President Cyril Ramaphosa in 2018 to build on the government’s efforts to transform public infrastructure development. The fund will be used as viability gap funding for large-scale infrastructure investments.

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Tshegofatso Mathe
Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian.

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