Drivers of South African Transport and Transport Infrastructure by FC Rust
Volume: 1 Issue 6 |  Friday, 25 June 2010 |  FC Rust  |  0 comment

Adapted from Chapter 10 of the Sustainable Transport and Mobility Handbook

Importance of Transport Infrastructure:

There is no doubt that infrastructure in general and specifically transport infrastructure plays a major role in economic development (Weisbrod G 1997, Chapman P et al 2002) as well as in social development (UNCDF 2007). In addition, construction activities form a significant part of a country’s GDP, South Africa’s construction industry contributes 3,6% (STATS SA 2008) and has been growing three times as fast as the total economy over the past five years. Currently there is a decline in the rate of growth, mainly in the residential building sector, due to the crisis related to declining asset values in the USA (the sub-prime problem), inflation and relatively high interest rates. Economists are, however, of the opinion that this is a short-to medium-term phenomenon that will correct in 2010 (Rust et al.2008). Ferreira and Khatami (1996) argue that investment in social and economic infrastructure will play an important role in increasing the productivity of labour and business. The importance of social development had been particularly highlighted in striving towards achieving the Millennium Development Goals (MDG 2007).

The South African government recognised the importance of transport and transport infrastructure in policies such as the Reconstruction and Development Programme (RDP 1994), the Growth Employment and Redistribution (GEAR 1996) and the Accelerated Shared Growth Initiative for South Africa – Asgisa (Mlambo-Ngcuka 2006). GEAR specifically states a requirement for “an increase in infrastructural development and service delivery making intensive use of labour-based techniques.” The Asgisa strategy refines the objectives of GEAR by placing specific emphasis on “[aligning] economic growth with improvements to the well-being of the poor. In terms of political economy, this requires developmental strategies enabling the poor to participate in economic growth, as well as benefit from it. For example, giving the poor better access to economic opportunities (employment, assets and markets), as well as to basic public services (education, health, housing, water, sanitation, etc), would contribute significantly to growth.” (Yemek E 2006).

The relationship between economic growth and infrastructure investment in terms of Gross Fixed Capital Formation (GFCF) is internationally recognised, depicted in Figure 1 in terms of a selection of developed and developing countries (Investec 2005). Integral to the growth objective in AsgiSA is therefore the recognition that infrastructure investment in terms of GFCF should be lifted to 25% of GDP (with public and private sector contribution respectively at 9% and 16%) in order to achieve the targeted 6% economic growth rate. This recognition is also evident from the government’s decision to make special budget allocations towards infrastructure development (EN 2005). Striving towards improved infrastructure is of course also currently being fuelled by the expectations of a world-class Football World Cup event in 2010. However, growth is currently being hampered by two key constraints: lack of skilled manpower and lack of appropriate infrastructure (Bruggemans 2005).

Sustainability and Transport:

The balance between economic development, environmental sustainability and socially acceptable infrastructure is critical: “By promoting economic growth strategies based on expanded infrastructure which are environmentally responsible and socially acceptable we are bringing a sustainable future closer to today’s reality.” Katherine Sierra, Vice President for Sustainable Development, (World Bank 2007).

In South Africa energy use in the transport sector accounts for about 50% of the country’s total energy usage with about 25% attributed to the transport sector (DSAS 2005). In addition, the emerging middle class in South Africa pushed internal consumption to unprecedented rates, particularly in motor vehicle sales. About 5 million South Africans claim to own, use or maintain a motor vehicle and drive approximately 5.6 billion kilometres per month. Sales of motor vehicles are heading towards 1 000 000 per year which will add significantly to current traffic volumes and road use as well as to the associated emissions (AMPS 2006). This places special emphasis on sustainability aspects of transport and infrastructure provision and maintenance.

For more on sustainability and transport, the importance of science, engineering and technology in transport, the state of infrastructure in South Africa and the drivers, trends and issues in the transport infrastructure sector read the rest of the chapter by ordering the Sustainable Transport and Mobility Handbook online here.

References:

AMPS. 2006. South African Advertising Research Foundation, 2006.

Bruggemans, C. 2005. Limits to Growth, FNB-Economic Subscriptions, First National Bank, July 26, 2005.

DSAS 2005. Digest of South African Energy Statistics 2005. Department of Minerals and Energy, Pretoria.

EN 2005. R320 billion public-infrastructure spending plan. Engineering News Volume 25 No 46.

Ferreira, D. & Khatami, K. 1996. Financing Private Infrastructure in Developing Countries. World Bank Discussion Paper No. 343. Washington DC.

Investec 2005. Prospects 2004-2009: Gross Domestic Fixed Investment Outlook, SA Economic Research 1st Quarter 2005.

MDG. 2007. Website for Millenium Development Goals, http://ddp-xt.worldbank.org, accessed in July 2007.

Mlambo-Ngcuka, P. 2006. A Catalyst for Accelerated and Shared Growth – South Africa (AsgiSA).

Rust, F.C., Botha, C., van Wyk, L., Steyn, W., du Plessis, C., Landman, K. and Coetzee, M. 2008. South African Construction Industry Technology Foresight Study: Summary report of desk top study. CSIR Technical Report: CSIR/BE/SRM/ER/2008/0063/B.

UNCDF. 2007. Localizing the Millennium Development Goals, available from United Nations Capital
Development Fund website, www.uncdf.org, accessed in July 2007.

Weisbrod G and Weisbrod B. 1997. Assessing the Economic Impact of Transportation Projects: How to Choose the Appropriate Technique for Your Project. Transportation Research Circular No 477, Transportation Research Board, Washington DC.

World Bank. 2007. Website of the World Bank, http://web.worldbank.org accessed in July 2007.

Yemek E. 2006. Budgetary Perspectives on Shared Growth Policy Interventions in South Africa. Occational paper, IDASA – Africa Budget Unit.