South Africa needs to move beyond a narrow focus on fiscal stability and adopt a more aggressive, growth-orientated approach to infrastructure investment, according to the Development Bank of Southern Africa (DBSA).
“If you think about our macroeconomic policy, you cannot find any bold developmental targets,” said DBSA chief economist Zeph Nhleko. “Right now, macroeconomic policy focuses on improving financial matrices — inflation, debt-to-GDP ratio and primary surplus.”
Nhleko highlighted a recent decisive shift toward infrastructure investment, pointing to the government’s R1.07-trillion commitment over the 2026 medium-term expenditure framework, alongside R455bn in planned spending by state-owned companies over the next three years. “That is exactly what we need, but we need more.”
A 2023 joint study by the World Bank and DBSA underscores the scale of the challenge, estimating that South Africa will need to spend R4.8- to R6.2-trillion on transport, water and sanitation, and education infrastructure by 2030 to meet its sustainable development goals — equivalent to up to 11.2% of GDP annually.
Nhleko said the budget, together with financial and non-financial state-owned enterprises, could be leveraged to address broader developmental challenges.
Beyond financing, he emphasised the role of research. “If we want to move towards growth and lift the economy to a higher trajectory, research can help fiscal policy explore more aggressive investment approaches,” he said.
South Africa needs sufficient reserves and alternative logistics options so critical services remain accessible despite disruptions.
— Zeph Nhleko, DBSA chief economist
This week the government-owned development finance institution hosted its fourth annual infrastructure research colloquium, showcasing insights from its open-access African Journal of Infrastructure Development.
“South Africa’s economic future depends on resilient, inclusive infrastructure,” Nhleko said, noting that the event aims to create conditions for public‑private partnerships to close financing gaps and accelerate delivery.
He stressed that infrastructure must not only be financed but also designed for greater access and resilience. “We found that the cost of making infrastructure resilient is low, but the social cost of [not doing so] is much higher,” he said, highlighting the long-term benefits of designing projects to withstand environmental and systemic challenges.
Nhleko said planning must also account for external shocks, such as the ongoing Iran conflict, which has driven up energy prices and exposed vulnerabilities in global supply chains. “South Africa needs sufficient reserves and alternative logistics options so critical services remain accessible despite disruptions.”
Over the past five to six years, DBSA had supported roughly R350bn in infrastructure development, with about a quarter allocated to project preparation and a similar share to direct financing. A significant portion was used to catalyse investment from public and private entities, while around 7% went toward implementation.
Nhleko said research and knowledge-sharing across sectors were also central to DBSA’s mandate. The African Journal of Infrastructure Development had published three issues — featuring 15 papers — addressing the lack of dedicated African infrastructure research while making high-quality papers widely accessible at minimal cost.
The journal would seek accreditation so it could be ranked alongside other international infrastructure publications. The colloquium featured papers on renewable energy financing, digital infrastructure and governance reforms, focusing on making infrastructure more resilient and inclusive.
Researchers and practitioners discussed ways to unlock blended finance, improve institutional capacity, and ensure infrastructure projects support equitable growth across South Africa and the continent.
Clinton Aigbavboa, professor of sustainable human development at the University of Johannesburg, who oversees the journal’s scientific process, said all research underwent a rigorous double-blind peer review to ensure credibility and provide evidence-based guidance for policymakers and practitioners.
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