Economic growth in South Africa averaged a meagre 0.8% per year since 2012, well below the sub-Saharan average of 2.9%1 — resulting in high unemployment, worsening inequality, weakened public services and low investment confidence. The government has responded by setting an ambitious target of 3% GDP growth2, significantly higher than forecasts from the South African Reserve Bank3 and the International Monetary Fund. To achieve its target, the government has to accelerate infrastructure investment — one of the most powerful tools for stimulating economic growth. Beyond its direct impact, infrastructure investment unlocks broader economic activity, strengthening industrial competitiveness, enabling business expansion, and supporting long-term job creation.
South Africa has a chronic infrastructure deficit — evidenced by power shortages, failing transport networks and deteriorating water systems. Without urgent intervention to enable private sector participation in these critical sectors, the country risks more stagnation, rising social instability and deepening poverty.
Infrastructure is more than just roads, ports and power plants; it is the backbone of a functioning economy and a key driver of long-term growth. With South Africa’s fiscus under significant strain, private sector participation is essential to fulfilling investment needs.
Attracting adequate funding requires structural reforms that ensure both public and private sector investment into key industries. Recognising that years of stagnation stem from systemic inefficiencies and policy failures, the government launched Operation Vulindlela (OV) in 2020, a joint initiative between the Presidency and National Treasury, aimed at fast-tracking reforms to unlock economic growth and job creation.
The first phase of OV targeted regulatory barriers in energy, transport, water, digital communications and the visa regime. It implemented 56 concrete actions across these sectors, unlocking R500 billion in new investment4. While challenges remain, OV has already played a crucial role in enabling private investment in electricity generation, addressing energy supply constraints and ending load shedding. It also facilitated the long-delayed auction of new spectrum after more than a decade of setbacks.
Bridging the funding gap
In his State of the Nation address, President Cyril Ramaphosa announced the government would invest more than R940 billion in infrastructure over the next three years, with R375 billion allocated to State-owned enterprises. Public funding alone is clearly insufficient to break the cycle of stagnation. Private sector participation — unlocking institutional capital from pension funds, development finance institutions, and private infrastructure funds — is vital in bridging the financing gap.
Ninety One is playing an active role in addressing this gap through the South African Infrastructure Credit Strategy. Launched in 2022, the Fund has made over 40 investments across critical sectors such as energy, transport and water, with more than R1 billion in commitments from investors. This underscores the essential role of private sector-led infrastructure development in driving economic growth. Across its Emerging Market Alternative Credit (“EMAC”) platform, Ninety One has deployed R58 billion across 130 investments and expects to play a leading role in connecting savings pools to real infrastructure.
Investing in essential infrastructure
Ninety One has invested over R1 billion in projects under the Renewable Energy Independent Power Producer Procurement Programme (REIPPP) as well as commercial and industrial (C&I) renewable energy projects. Investments include De Aar Wind Farm, an operational asset, and Virginia Solar Park, currently under construction as part of REIPPP Bid Window 6. These, alongside broader infrastructure investments in SANRAL and the Lesotho Highlands Water Project, highlight the role of institutional investors in financing critical infrastructure, complementing government efforts.
Another key area primed for private investment is South Africa’s water infrastructure. The government’s proposal to ring-fence water revenue for maintenance and upgrades should establish a bankable model that attracts investment5. As a long-term infrastructure investor, Ninety One has supported key water projects, including those led by the Trans-Caledon Tunnel Authority (TCTA), which plays a crucial role in South Africa’s bulk water supply.
With an estimated R1.2 trillion required for water and sanitation infrastructure by 2030, private sector participation will be essential in ensuring long-term water security. The Lesotho Highlands Water Project, a major TCTA initiative, has already demonstrated the sector’s job-creating potential, supporting 8,500 temporary construction jobs.
From reform to results
Restoring Transnet’s coal and iron ore rail networks is another opportunity ripe for private investment. These are essential economic arteries that drive mineral exports and support industrial activity, yet years of neglect and inefficiencies have strangled capacity, curbed exports and hampered economic growth.
While Phase 1 of OV has delivered important reforms, South Africa still faces a tipping point. The collapse of local governance, the fragility of state-owned enterprises and the urgency of energy and logistics reform leave little room for delay — without decisive action, economic stagnation will deepen. Success will not be measured by policies passed but by the alignment of businesses, investors and government reformers in removing barriers and unlocking capital. The end goal must be sustained, inclusive growth that fundamentally alters the country’s economic trajectory.
Phase 2 of OV will build on these efforts, focusing on local government reform, advancing digital infrastructure and unlocking public land for affordable housing. Its success will depend on the stability of the Government of National Unity (GNU) and its ability to drive reform with urgency.
These are not abstract policy goals; they are the foundations for job creation. When basic services function, businesses can expand. When digital infrastructure improves, new industries emerge. When people live closer to economic opportunities, productivity rises.
The ultimate measure of success is job creation. Policies need to drive employment and economic expansion. South Africa cannot afford to wait — only decisive action can drive meaningful progress.
The Ninety One SA Infrastructure Credit Strategy is designed to help facilitate the flow of private investments into high-quality South African infrastructure projects. To find out more about our infrastructure investments, please click here.
1. Sub-Saharan Africa GDP Growth Rate 1961-2025 | MacroTrends
2. President Cyril Ramaphosa: State of the Nation Address | South African Government
3. Statement of the Monetary Policy Committee January 2025
4. Operation Vulindlela: towards a second wave of reform
5. Statement To The National Assembly On Water Security In South Africa - ANC Parliamentary Caucus
Meet the team
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Our team manages numerous strategies across illiquid and liquid credit, including 17 vintages of the Credit Opportunities Fund, closed-ended funds that focus on private and illiquid credit in South Africa and the rest of Africa. |
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R58bnInvested in infrastructure over 20 years |
R7 billionRate of deployment per annum |
130+Projects and borrowers supported |
R100bn +Assets under management |
50%of illiquid debt strategies are in infrastructure |
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Infrastructure investing
