Tackling South Africa’s Infrastructure Deficit: The Role of Development Finance Institutions

The document examines South Africa's reliance on international DFIs and MDBs to bridge a ZAR502 billion funding gap in its Infrastructure Build Programme, noting a historical hesitation to seek such aid. It highlights that while renewable energy has received the bulk of funding, there are significant gaps in project preparation skills and coordination. The author recommends that the Investment and Infrastructure Office (IIO) lead the coordination of donor assistance and that the government clarify funding structures and procurement processes to attract private investment.

• Investment in infrastructure is critically low in South Africa; gross fixed capital formation (GFCF) was 18.19% of GDP in 2019, whereas the acceptable norm for developing economies is 30–35%.
• Renewable energy and energy-efficiency projects have received the majority of DFI funding, with Eskom and local DFIs like the Development Bank of Southern Africa (DBSA) and the Industrial Development Corporation (IDC) receiving the largest shares.
• The South African government's fiscal position is precarious, with a debt-to-GDP ratio expected to reach 100% by 2023, compared to an emerging-market average of 45%.
• A primary bottleneck in infrastructure delivery is the lack of skills for conceptualising and preparing 'bankable' projects, leading to incomplete projects and budget overruns.
• The Investment and Infrastructure Office (IIO) has introduced the Sustainable Infrastructure Development Symposium (SIDS) methodology to better integrate the private sector into the planning process, as they previously entered too late to provide input.
• The government is moving away from the National Treasury's public-private partnership (PPP) model, which Minister de Lille described as 'time-consuming and cumbersome', in favor of models like build-operate-transfer (BOT) and build-operate-own and transfer (BOOT).

APA

Ramokgopa, D. (2021). Tackling South Africa’s Infrastructure Deficit: The Role of Development Finance Institutions. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2021/03/Policy-Insights-102-ramokgopa.pdf

Chicago

Ramokgopa, Dineo. Tackling South Africa’s Infrastructure Deficit: The Role of Development Finance Institutions. South African Institute of International Affairs, 2021. https://saiia.org.za/wp-content/uploads/2021/03/Policy-Insights-102-ramokgopa.pdf.

Wikipedia

{{cite report |last1=Ramokgopa |first1=Dineo |title=Tackling South Africa’s Infrastructure Deficit: The Role of Development Finance Institutions |publisher=South African Institute of International Affairs |date=March 2021 |url=https://saiia.org.za/wp-content/uploads/2021/03/Policy-Insights-102-ramokgopa.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ramokgopa2021tackling, author = {Ramokgopa, Dineo}, title = {{Tackling South Africa’s Infrastructure Deficit: The Role of Development Finance Institutions}}, institution = {South African Institute of International Affairs}, year = {2021}, month = mar, url = {https://saiia.org.za/wp-content/uploads/2021/03/Policy-Insights-102-ramokgopa.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }