To create growth, South Africa needs to invest in infrastructure and infrastructure must be front and centre in the debate over the Budget, says business formation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

A key question is how to support the urgently needed growth imperative. Economic growth enables delivery for the people of South Africa, creating jobs and generating revenue that government can spend on services, making future Budgets easier, she said in her latest weekly newsletter.

Infrastructure can be rolled out by government, the private sector and through public-private partnerships (PPPs). The private sector has, for many years, been the dominant investor in infrastructure, but its focus is naturally on building the infrastructure that enables the activities of firms, such as broadband and private electricity generation.

However, social infrastructure, such as hospitals, court buildings and government-run network infrastructure like railways and powerlines, requires government to play a role directly.

The growth of the economy fundamentally depends on infrastructure investment. It expands the capacity of the economy to produce more goods and services and, ultimately, to create work opportunities, Mavuso said.

However, while revisions to the regulations governing PPPs were published in February, which should make it easier for government and the private sector to partner to accelerate infrastructure investment and are a significant improvement, PPPs still require the public sector to embrace them as an effective way to get new projects off the ground.

The whole of government needs to elevate the option of PPPs by encouraging decision-makers from councils to departmental accounting officers to use them as a path of least resistance to getting infrastructure happening, she said.

Further, the amendments empower national departments to create dedicated units to support the development of PPPs, which can work with a national PPP within Treasury. These are very positive, but it will take political will from the whole of Cabinet to make them more than possibilities.

“This is fundamentally about getting growth happening,” she emphasised.

Further, South Africa’s deteriorating relationship with the US is a clear risk to growth, Mavuso added.

“The political issues are evolving, and I think President Cyril Ramaphosa has dealt with them appropriately, signalling his intention to follow diplomatic decorum and reaffirming his commitment to strong bilateral relations with the US.

“The situation with the US is regrettable but it is a reality we must work with. Our response must be to focus on the possible, working with US counterparts where we can.

“In the pursuit of economic growth, we must be agile and focused on the ultimate growth imperative. There is nothing to be gained by decrying the actions of counterparts. We must be ready to pivot to the kind of business that is possible in the world as it is, not as we wish it to be,” she said.

South Africa's parliamentarians should keep this in mind as they prepare to debate the Budget tabled by Finance Minister Enoch Godongwana last week.

While the legal guardrails help to ensure public finances cannot be radically undermined during the process, the country's lawmakers must shepherd the process in a productive way that enables growth, she highlighted.

Further, South Africa's international relations elsewhere were more positive, as demonstrated by the announcement of a €4.7-billion investment package by the EU to support green energy and vaccine production during the first bilateral summit between the parties to be held in seven years.

This signals the importance of international relationships with counterparts across the world, ones South Africa would build this year through the hosting of the G20. The EU is helping to advance key national objectives including the just energy transition and healthcare access, Mavuso noted.

In finalising the Budget, the priority must be to stimulate growth through infrastructure investment, she said.