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Road construction
Over the medium term, government plans to allocate over R1 trillion to infrastructure projects across the country, this is according to Finance Minister Enoch Godongwana.
“This budget invests over R1 trillion in critical infrastructure to lift economic growth prospects and improve access to basic services,” he said while iterating the third version of National Budget in Cape Town on Wednesday.
Godongwana expanded his speech to draw government’s measures to forge economic growth with a renewed focus on infrastructure development to foster faster economic growth and measures to address persistent challenges of high unemployment and poverty.
In his 2024 Mid-Term Budget Policy Statement (MTBPS), Godongwana estimated South Africa’s infrastructure spend at R940 billion.
Godongwana says increased infrastructure investment, through Operation Vulindela, will expand power-generation capacity, upgrade and expand the transport network and improve sanitation and water services with the aim of stimulating private-public partnerships.
Although the country’s debt-service costs remain high, mounting to over R426,3 billion, the minister’s confident that in 2025/26, government debt is projected to stabilize at 77.4 per cent of GDP.
Godongwana says this is 1.2 percent higher than projected in the March 12 budget, and it is mainly due to lower nominal GDP.
According to Godongwana, this means in 2025/26 the country will be spending around R1.2 billion per day to service debt.
“This is more than what the country spends on frontline services such as health, the police and basic education,” declared Godongwana.
Godongwana maintains efforts to reverse this trend and prevent the cost of debt from robbing resourcing that otherwise be spent on social needs.
