[Letter] Infrastructure investment lags population growth

The September 2024 Centre for Risk Analysis “Macro Review: “Investment: Not Enough Eggs in SA’s Basket”, unpacks how between 2009 and 2023 investments into economic and public social infrastructure declined substantially.

Economic infrastructure, which includes roads, bridges, dams, electricity and water supply, reached R187.2bn in 2009, a record high of R216.8bn in 2015, and then steadily declined to R118.4bn in 2023. Economic infrastructure thus decreased from 25.9% of total investment in 2009, to 27.2% in 2015, and finally to 17.3% in 2023.

The level of public social infrastructure investment in relation to total investment has remained relatively stable since 2009. Public social infrastructure includes schools, hospitals and other administrative services.

As a proportion of total investment, investment spent on public social infrastructure constituted 3.56% of investment in 2009, 4.67% in 2015, and 4.39% in 2023. The raw numbers are R25.8bn in 2009, compared with R37.2bn in 2015 and R30.1bn in 2023.

The statistics of economic infrastructure, especially public social infrastructure, must be kept in mind relative to SA’s population growth. In 2009 about 49-million people were living in the country; the 2022 census estimated the population at 62-million. This is a 21% increase in the population size. There are thus 13-million more people who use roads, electricity and water, need to send their children to schools, and visit hospitals.

The most important indicator from our macro review is the remarkable decline in state spending on physical infrastructure. Though the population increased 21% since 2009, investment in economic and public social infrastructure has not increased proportionately.

The takeaway is that the population is rapidly outgrowing investment into economic and public social infrastructure.

Letter originally appeared here.