Government is redirecting spending from consumption to infrastructure investment in an effort to accelerate economic growth, expand productive capacity, and improve public services.
“Infrastructure is a catalyst for economic growth and remains at the centre of government’s reform agenda. We are shifting spending towards productive investment that expands economic capacity, improves access to essential services and supports employment. Our goal is not simply to spend more, but to spend better.
“Every rand invested must deliver greater economic returns, attract private investment and improve the quality of life of South Africans,” Finance Minister Enoch Godongwana said on Wednesday.
The Infrastructure Finance and Implementation Support Agency (IFISA), announced by Finance Minister Enoch Godongwana in the February Budget, began operating on 1 April 2026.
It supports projects across all spheres of government, with a potential investment value of more than R207 billion.
Godongwana said these projects will help mobilise private capital and expertise, improve risk sharing and bring infrastructure projects to market faster.
National Treasury said in its Medium-Term Budget Policy Statement (MTBPS) document that the infrastructure reform agenda supports this shift by strengthening the systems used to prepare, manage and deliver projects.
“Improving project preparation and implementation is a priority. This will reduce underspending, accelerate delivery and ensure that infrastructure investment translates into productive assets and better public services.
“Reforms are also under way to mobilise private-sector finance and expertise, augmenting limited fiscal resources and state capacity. These measures will improve the efficiency of infrastructure investment and ensure that it delivers value for money,” Treasury said.
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Public Private Partnerships
Government is also fast-tracking the use of Public Private Partnerships (PPP), particularly in municipalities where infrastructure backlogs and service delivery pressures are most severe.
Of the 68 projects currently in the PPP pipeline, 31 are municipal projects.
“A major milestone has been reached with the submission of the amended Municipal PPP Regulations to Parliament for the required 30-day scrutiny period. This is the final step before implementation,” Godongwana said.
The new regulations will simplify processes, reduce transaction costs and make it easier for municipalities to partner with the private sector to deliver infrastructure and services.
Furthermore, the Budget Facility for Infrastructure (BFI) is delivering results.
“The BFI ensures that scarce public resources are directed to well-prepared, implementation-ready projects. Fiscal support approved through the BFI now stands at more than R100 billion.
“The infrastructure bond has raised over R14 billion since its inaugural issuance in December 2025. These funds are earmarked for projects in the BFI pipeline,” he said.
Godongwana encouraged more public institutions to make use of the BFI when developing large infrastructure projects.
“Where additional support is required, IFISA [Infrastructure Finance and Implementation Support Agency] stands ready to assist with project preparation and the development of funding proposals.
“We are already working with institutions in the criminal justice system, in particular the police, to prepare projects for future BFI windows,” he said.
The Minister emphasised that infrastructure delivery is not only about building new assets, saying it’s also about protecting and maintaining the assets we already have.
“Every maintenance project deferred today becomes a larger repair bill tomorrow. Better project selection, stronger implementation capacity, improved asset management and effective partnerships with the private sector will ensure that infrastructure investment translates into faster growth, more jobs and better public services.
“Our task is clear: build faster, maintain better and attract private investment. Above all, we must ensure that every rand invested in infrastructure works harder for the people of South Africa,” he added.
Infrastructure Conditional Grant Review
Godongwana announced that government is reforming the infrastructure grant system to strengthen planning, accountability and oversight.
This follows the government completing a review of infrastructure grants to provinces and municipalities.
Between 2017/18 and 2023/24, national government transferred R887 billion through infrastructure conditional grants to provinces and municipalities, which the Minister said was a substantial investment.
“The review assessed whether these grants are delivering infrastructure and improving service outcomes. The findings were clear. While most funds are spent, projects are often delayed, incomplete, or fail to deliver the intended benefits.
“Conditional grants are exactly that, conditional. Funds must be used for their intended purpose and approved projects. Transferred funds must result in completed projects, functional infrastructure and reliable services for communities,” he said. –SAnews.gov.za
Source: Original report at SAnews.gov.za.
