Bridging the Infrastructure Gap in South Africa: The Role of Strategic Development Companies

Written By Matthys Ras

South Africa's infrastructure is a critical element for economic growth, yet a substantial deficit persists, impacting the lives of millions. According to the African Development Bank, infrastructure gaps across Africa limit economic growth by at least 2% per year and cut productivity by as much as 40% (source: African Development Bank, “The Infrastructure Financing Gap”). South Africa specifically requires a significant increase in infrastructure investment to stimulate growth, create jobs, and ensure long-term sustainability.

“The housing sector also lags far behind demand, with a backlog of approximately 2.1 million units according to the Department of Human Settlements, resulting in many South Africans living in informal settlements…”

The Current Infrastructure Deficit
South Africa’s infrastructure challenges are broad, covering areas such as transportation, energy, water, and housing. For example, the country’s energy grid has faced instability, with load-shedding affecting both businesses and households. Eskom, the national power utility, reported 200 days of load-shedding in 2022 alone, with projected costs to the economy exceeding R500 billion (source: Eskom, “Annual Financial Report”). In terms of transportation, only about 30% of the national road network is in good condition, while the remaining requires urgent repairs or upgrades.

The housing sector also lags far behind demand, with a backlog of approximately 2.1 million units according to the Department of Human Settlements, resulting in many South Africans living in informal settlements. Addressing these deficits requires not only government action but substantial private sector involvement and foreign investment.

CREATE’s “Outside-In” model addresses these infrastructure challenges by bringing in international investors and mobilizing expertise from sectors like renewable energy, real estate, and technology. CREATE is strategically positioned to fill the gap by developing high-impact projects such as the Coega Ridge Smart Village. This approach not only accelerates the development timeline but also ensures that infrastructure projects meet global standards.

  • Annual Infrastructure Need: $100 billion to meet national and regional requirements (African Development Bank).

  • Projected Investment Shortfall: South Africa’s infrastructure investment gap is over R1 trillion by 2030, according to the Presidential Infrastructure Coordinating Commission (PICC).

  • Job Creation Potential: Estimates suggest that filling the infrastructure gap could generate over 1.6 million jobs in South Africa by 2030.

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Matthys Ras
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