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GOVERNMENT SHOULD FAST-TRACK THE ROLL OUT OF INFRASTRUCTURE PROJECTS TO STIMULATE ECONOMIC GROWTH

By 30th Jun 2015Sep 20th, 2019No Comments

Infrastructure development plays a critical role in job creation and economic performance. To date, the goals of the National Infrastructure Development Plan have appeared to be quite ambitious. The Cabinet and the Presidential Infrastructure Coordinating Commission developed 18 Strategic Integrated Projects (SIPs) to support economic development and to address service delivery on the overall projects. Among these projects are the Spatial Strategic Integrated Projects, the Energy Strategic Integrated Projects and the Social Infrastructure Strategic Integrated Projects. These projects are at the core of improving the living conditions of the disadvantaged communities in South Africa, with the view of addressing the imbalances that currently exist in the South African landscape.

Over the past years service delivery protests have been on the rise in South Africa as a result of people getting impatient with the Government’s lack of implementation of NDP initiatives and its failure to improve the living conditions of the poor. Coupled with these service delivery protests has been the Afrophobic attacks on foreign African nationals over economic participation, among other things. This is nothing less than disadvantaged South Africans who find themselves frustrated due to lack of employment opportunities and ever-increasing costs of living can expect. It is also important to note that much of these protests take place in the townships where there is extensive lack of infrastructure development and service delivery.

If these socio-economic issues are to be addressed, the Government should, as one of the measures aimed at resolving such issues, fast-track the implementation of the strategic projects identified in the NDP. The implementation of these projects will not only contribute towards the eradication of poverty as a result of employment creation, but it will also help stimulate the South African economy and help it rise out of the doldrums. 

It goes without saying that infrastructure development plays a fundamental role in accelerating any country’s economic growth. Governments’ spend on infrastructure development not only provides a stimulus to a country’s economic growth, but it can also crowd in private sector and foreign direct investment (FDI).

Countries that boast highly-developed infrastructure tend to do better than their less-developed counterparts when it comes to attracting private sector investment as well as FDI. While South Africa does boast well-developed infrastructure, when compared to its African counterparts, there is no doubt that there is still room for improvement. The improvement of infrastructure – energy, rail and road transport, dams, schools, hospitals, stadiums, etc. – will inject massive new investment in the economy and lay the basis for a strong platform for economic performance.

In addition to providing an environment conducive for economic growth, infrastructure development can also create employment opportunities for, especially, the unemployed youth of South Africa, who are typically at the forefront of service delivery protests and Afrophobic attacks.

According to Statistics South Africa’s Quarterly Employment Statistics for the fourth quarter of 2014, employment in the metals and engineering sector alone:

  • dropped from an average of 394 647 (calendar 2014) to 386 910 by the fourth quarter of 2014;
  • Employment numbers declined by 1,4% on the 3rd quarter of 2014;
  • There was a 2,5% drop from the first to the second half of 2014;
  • There was a 3,4% decline when the second half of 2014 is compared with the second half of 2013;
  • The full year (2014) saw employment contracting by 2,2% on 2013 or by nearly 9 000 people;
  • When the 4th quarter of 2014 is compared to the 4th quarter of 2013, the decline was 3,9% or nearly 16 000 people.

These numbers, which can also be attributed to the red tape implemented through the recent labour legislation amendments, are extremely concerning in a country, such as South Africa, where youth unemployment is at an all-time high.

In addition to fast-tracking the rollout of the infrastructure projects, the Government should, through the various SETAs, also upskill the unemployed youth of South Africa through, among others, artisan training, apprenticeship and learnerships. This will ensure that the unemployed youth is well equipped to take advantage of the opportunities that will be presented when the SIPs are ultimately implemented. The next National Skills Development Strategy should also be more aligned to respond to the NDP imperatives.

It is, therefore, of paramount importance that the Government fast-tracks the implementation of the NDP projects not only to stimulate economic growth, but also to also contribute towards eradication of poverty, and other socioeconomic challenges through employment creation.

Bridgette Mokoetle is the Legal Executive of the Steel and Engineering Industries Federation of Southern Africa.

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