AFRICAN BUZZ •
• The high cost of capital in South Africa , with the then prime overdraft rate of 11.75 % 6 – a full 175 basis points higher than before COVID-19 . Lending rates are at their highest level in 14 years , despite the consumer price index having been within the South African Reserve Bank ’ s ( SARB ’ s ) target range for inflation of 3 % to 6 % for eleven straight months and the long-standing absence of demand inflation in the economy .
• Dozens of municipalities in South Africa have been dysfunctional for many years , which prevents them from accessing conditional National Treasury grants earmarked for infrastructure upgrading .
• Fiscal constraints because of weak economic growth have prevented any significant increase in construction-related capital expenditure in the 2024 / 25 National Budget . will offer effective vehicles to drive sustainable infrastructural development across Africa . •
References :
1 . https :// www . africanmining . co . za / 2024 / 07 / 02 / growing-infrastructureneeds-in-africa-and-ensuing-business-opportunities /
2 . https :// www . afrisam . co . za / media-zone / little-cheer-from-budgetspeech-but-construction-resilient /
3 . https :// www . mineralscouncil . org . za / industry-news / publications / factsand-figures
4 . Globe News Wire : https :// finance . yahoo . com / news / south-africaconstruction-industry-report-103800223 . html
5 . https :// www . afrimat . co . za / aci-reflects-marginal-decline-in-firstquarter-2024 /
6 . As at the time of writing in June 2024 .
Furthermore , construction activity is also traditionally quite subdued during the first three months of the year , due to a lengthy summer holiday period and the Easter holidays . Moreover , the uncertainty surrounding the elections may have played a role in a degree of hesitancy toward new construction projects . Botha noted that post-election , fortunately , the two largest political parties appear to be committed to maintaining the Constitution and the principle of private property rights .
Looking ahead On a more positive note , from a regional perspective – “ spend on infrastructure among sub-Saharan African countries is expected to reach USD180-billion per annum by 2025 ” 1 and hopefully the latest trend in Public-private partnerships ( PPPs )
Despite near-term challenges , the medium to long term growth story in South Africa remains intact . The South Africa Construction Industry Report 2024 forecasts that the construction industry in South Africa is expected to grow by 4.8 % to reach R160.65-billion in 2024 .
www . africanmining . co . za African Mining Publication African Mining African Mining • January 2025 • 9