BoitumeloMosakoLivefromThinkSummit-FinancingInfrastructure&DevelopementinSouthAfrica

 

Boitumelo Mosako Live from Think Summit - Financing Infrastructure & Developement in South Africa

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What was discussed

Boitumelo Mosako: Financing Infrastructure & Development in South Africa  

Featuring Boitumelo Mosako (CEO of the DBSA), Dr. Satu Kahkonen (World Bank Country Director), and Mmakgoshi Lekhethe (IDC Representative), moderated by Mary Vilakazi (RMB).

In a powerful, all-women panel at the RMB Think Summit, top leaders from the continent’s leading development finance institutions (DFIs) and the World Bank took the stage to address South Africa’s infrastructure funding gap. Moving past repetitive rhetoric, the panel delivered concrete updates, shared successful templates, and outlined a highly collaborative roadmap to mobilize private capital and accelerate execution.

Here are the key takeaways from the discussion:

1) The Scale of the Challenge

The Funding Gap: The African Development Bank estimates an annual infrastructure financing gap of $170 billion across energy, transport, water, digital, and logistics. Locally, South Africa must spend an additional R750 billion to R1 trillion annually on infrastructure to elevate infrastructure-to-GDP to the targeted 25% (up from the current 15%).

Accumulated Backlogs: The panel highlighted severe maintenance backlogs across public sectors—including R30 billion in government buildings, R400 billion in roads, R400 billion in water and sanitation, and R200 billion in school infrastructure.

2) Dr. Satu Kahkonen (World Bank): Global Lessons in Systemic Reforms

Faced with fiscal constraints, the state cannot close this gap alone. Dr. Kahkonen shared three priority reform areas to successfully attract private sector participation, drawing on successful global models like Turkey, Chile, and Brazil:

Credible, Predictable Reform Programs: Governments must establish long-term policy certainty. Changing the rules midway is the fastest way to drive away investors.

Open Sectors to Private Participation: Partnering with the private sector in a transparent manner exponentially multiplies infrastructure capacity.

Strengthen Independent Regulators: Having robust, impartial, and highly professional regulators in energy, transport, and water is crucial for building private investor confidence.

3) Boitumelo Mosako (DBSA): Strengthening Municipalities & Driving Execution

Representing the Development Bank of Southern Africa (DBSA), Mosako shifted the focus toward practical execution and local service delivery:

The Municipal Bottleneck: Mosako emphasized that strong bulk infrastructure is useless if local municipalities cannot deliver services to households and businesses. A core priority of the DBSA's Decadal Strategy is supporting and building capacity within under-resourced municipalities.

The "Willing Coalition" & Partner District Model: The DBSA is successfully implementing diagnostic and planning interventions in eight districts across the country. They provide technical capacity, engineers, and project preparation support to build a cross-sectoral project pipeline valued at R13 billion.

Direct Project Delivery: Beyond financing, the DBSA acts as a direct implementing agent to augment state capacity. Successes include rebuilding parliament post-fire and constructing the first post-1994 academic hospital in Limpopo (valued at R4 billion).

4) Mmakgoshi Lekhethe (IDC): Catalysing Industrialization and Localisation

Lekhethe discussed how the Industrial Development Corporation (IDC) is aligning its strategy to support South Africa's broader infrastructure drive:

Legacy Sectors and Beyond: While legacy sectors like mining and manufacturing remain key, the IDC is aggressively targeting the green economy, battery manufacturing (vanadium/lithium), agro-processing, and critical minerals.

Massive Localisation Opportunities: Through an MOU signed with the National Transmission Company South Africa (NTSA) for the Transmission Development Program, the IDC identified that nearly 70% of the required components can be manufactured locally in South Africa, boosting domestic demand and creating jobs.

Regional Integration: Utilizing opportunities from the African Continental Free Trade Area (AfCFTA), the IDC is leveraging blended funding structures to support South African businesses as they expand into the broader African region.

5) Key Project Updates & Financial Innovation

The Credit Guarantee Vehicle (CGV): In a major announcement, Dr. Kahkonen revealed that the World Bank, DBSA, and IDC are submitting the licensing request for the much-anticipated CGV to the South African Reserve Bank. Designed to mitigate repayment risks and de-risk major infrastructure and transmission projects, the CGV is on track to be up and running by the end of the calendar year.

Unlocking Corporate Cash: Responding to estimates that SA corporates are sitting on R2 trillion in excess cash, the panel noted the issue isn't a lack of money or tools. Instead, unlocking this cash requires creating a predictable pipeline of bankable, transparent projects packaged in listed instruments—such as infrastructure or sector-specific bonds—that institutional investors can easily buy into.

Reforming National Payments: Dr. Kahkonen highlighted that 15 million South Africans remain unbanked or operate strictly on cash. Opening the National Payment System to non-bank players and FinTechs via the upcoming National Payment System Bill will introduce mobile money at scale, unlocking massive, untapped economic activity in townships.

A Closing Message

The panel concluded on a note of resolute optimism. Pointing to an estimated $4 trillion in domestic capital sitting on the African continent, Boitumelo Mosako noted:

"There is no better time for Africa to rise. We as Africans are at an inflection point, and it’s time for us to leverage our institutions, mobilize our own capital, and build our own infrastructure. No one is going to do it for us."