R207 billion in projects, but Treasury admits grants often buy delays and half-built sites

Government is redirecting spending from consumption to infrastructure investment, Finance Minister Enoch Godongwana said on Wednesday, with a new support agency now working on projects carrying a potential investment value of more than R207 billion.

The Infrastructure Finance and Implementation Support Agency (IFISA), announced in the February Budget, began operating on 1 April 2026. It supports projects across all spheres of government.

“Infrastructure is a catalyst for economic growth and remains at the centre of government’s reform agenda,” Godongwana said. “We are shifting spending towards productive investment that expands economic capacity, improves access to essential services and supports employment. Our goal is not simply to spend more, but to spend better.”

The minister said the projects would help mobilise private capital and expertise, improve risk sharing and bring infrastructure projects to market faster. National Treasury, in its Medium-Term Budget Policy Statement, said the reform agenda strengthens the systems used to prepare, manage and deliver projects.

“Improving project preparation and implementation is a priority. This will reduce underspending, accelerate delivery and ensure that infrastructure investment translates into productive assets and better public services,” Treasury said.

Godongwana also set out the findings of a review of infrastructure grants to provinces and municipalities, which government has now completed. Between 2017/18 and 2023/24, national government transferred R887 billion through infrastructure conditional grants to provinces and municipalities.

“The review assessed whether these grants are delivering infrastructure and improving service outcomes. The findings were clear. While most funds are spent, projects are often delayed, incomplete, or fail to deliver the intended benefits,” he said.

“Conditional grants are exactly that, conditional. Funds must be used for their intended purpose and approved projects. Transferred funds must result in completed projects, functional infrastructure and reliable services for communities.”

Government is now reforming the grant system to strengthen planning, accountability and oversight, he said.

On partnerships with the private sector, Godongwana said 31 of the 68 projects in the Public Private Partnership pipeline are municipal projects, with the focus on municipalities where infrastructure backlogs and service delivery pressures are most severe. The amended Municipal PPP Regulations have been submitted to Parliament for the required 30-day scrutiny period, which the minister described as the final step before implementation.

Fiscal support approved through the Budget Facility for Infrastructure now stands at more than R100 billion, and the infrastructure bond has raised over R14 billion since its inaugural issuance in December 2025. Those funds are earmarked for projects in the BFI pipeline.

Godongwana said work is already under way with institutions in the criminal justice system, in particular the police, to prepare projects for future BFI windows.

He also argued that delivery is not only about new assets. “Every maintenance project deferred today becomes a larger repair bill tomorrow,” he said. “Better project selection, stronger implementation capacity, improved asset management and effective partnerships with the private sector will ensure that infrastructure investment translates into faster growth, more jobs and better public services.”

This report is drawn from the SAnews (South African Government News Agency) account of the minister’s remarks and Treasury’s Medium-Term Budget Policy Statement. The full MTBPS document and the grant review findings were not published with that account. The original SAnews report is at https://www.sanews.gov.za/south-africa/infrastructure-reforms-unlock-projects-worth-r207-billion.