Public sector spending on infrastructure and fixed assets has seen growth for the third-straight time, with Eskom leading the spending.
According to Stats SA, public sector spending on infrastructure and other fixed assets continued their upward trajectory, rising to R276 billion in 2024 from R234 billion in 2023.
This was the third straight increase following the five-year downturn. However, Stats SA noted that the total is still far off the peak of R283 billion in 2016.
Economists often cite investment in infrastructure as one of the most effective ways to stimulate economic growth.
However, the nation only spends around 5% of its expenditure on infrastructure, which is less than the 10% goal of the National Development Plan and the 30% that economists recommend.
There has been increased focus on infrastructure spending under the current administration, with President Cyril Ramaphosa stating that he wants to turn the country into a construction site.
In 2024, increased work on electricity infrastructure was primarily responsible for the lift 2024.
Eskom increased capital spending by R10.2 billion (from R39.3 billion to R49.5 billion), focusing on its capacity expansion programme and ongoing projects at Medupi and Kusile.
However, Eskom wasn’t the only large spender, with PRASA increasing capital expenditure by R5,9 billion (from R15.9 billion to R21.8 billion)
The agency restored infrastructure on key service lines. It also reintroduced several lines, including the Johannesburg-Naledi and Pretoria-Pienaarspoort routes.
The rail provider was severely impacted by the Covid-19 pandemic and vandalism of its network, but has seen an over 600% increase in customer numbers compared to the start of the decade.
Also, in terms of transport, SANRAL increased capital expenditure by R3.9 billion (from R9.4 billion to R13.3 billion). This was focused on the repair and construction of key roads.
PRASA’s focus on the rail network was supported by Transnet, which recorded an increase of R2.9 billion (from R15.3 billion to R18.3 billion) to maintain capacity on port, pipeline, and rail infrastructure.
Other large contributors to the R41.9 billion rise in public-sector capital expenditure included the three largest metros: Johannesburg, Cape Town, and eThekwini.
The Water Trading Entity, the National Department of Water & Sanitation and uMngeni-uThukela Water were also major spenders of capital.
The largest pieces of the pie
Eskom’s total increase in capital expenditure saw its share of total public expenditure increase from 16.8% in 2023 to 17.9% in 2024. It remains the largest spender on infrastructure in the nation.
Eskom and Transnet dominated the public corporations’ category. Public corporations accounted for 30.6% of total spend in 2024.
Municipalities contributed 25.9%, with the cities of Cape Town, Johannesburg eThekwini being the largest contributors in the group/
Extra-budgetary accounts and funds, which are public institutions responsible for delivering services on behalf of the government, accounted for 19.6%.
Notably, the provincial government (13.6%), the national government (6.1%) and higher education institutions (4.1%) reported the smallest shares of capital expenditure.
“Infrastructure forms the backbone that connects different parts of the economy, supporting the flow of goods, travel and communication,” said Stats SA.
“Ongoing investment and maintenance by both the public and private sectors help ensure the smooth flow of economic activity across the country.”
