CONSTRUCTION BUSINESS & PROJECT MANAGEMENT CONFERENCE 2022 · Vol. 2022, Issue 1

Sources of financing public infrastructure projects in South Africa

Jabulani Jacobs, Wellington D. Thwala, Clinton Aigbavboa and Khotso Dithebe

Keywords: Delivery, financing, public infrastructure, innovative

Abstract

The lack of financial investment in infrastructure development limits the delivery of public infrastructure; thus, it is important to ensure adequate investments for the delivery of infrastructure. This study aims to identify sources of financing public infrastructure projects in South Africa. To achieve the objective of the study, a quantitative method was used to gather data; the data was collected using closed-ended questionnaires that were distributed using google forms. The sample of 196 respondents, currently registered with the Councils for the Built Environment Professions (CBEP), was approached to form part of the study. 153 of the 196 completed and returned questionnaires (a response rate of 78%). The data received was analysed and interpreted using descriptive statistics and exploratory factor analysis. Given the explored sources of financing public infrastructure projects in South Africa, the findings reveal that government budget, Development Bank of Southern Africa (DBSA), local tax revenues, Public-private partnerships (PPPs) and state-owned enterprises (SOEs) are the key sources available for the South African government to use to finance public infrastructure projects in the country. Currently, in South Africa, government and state-owned entities mostly finance the delivery of public infrastructure, and financing only from the government is not adequate to meet the infrastructure-financing needs. This study recommends that the private sector participate in infrastructure investment and project financing schemes in order for the government to be able deliver the much-needed infrastructure and that international and innovative financing schemes should be considered for the financing of public infrastructure projects in South Africa.