12 infrastructure priorities were announced during the opening session of the Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) 2024, by President Ramaphosa.
“Infrastructure is an enormous economic multiplier, providing dividends for an economy long after the infrastructure has been built,” said President Cyril Ramaphosa in his keynote address at the symposium.
12 projects, with an injection of R120 billion, over the next 7 years, include some water projects.
#LNG import terminal in KZN, R2, 1 billion, to create 4, 456 jobs.
#Durban Container Turminals Pier, R39 billion, to create 98, 213 jobs.
#Berth A100 for liquid bulk (is in Port Ngqura), R2, 2 billion, to create
#Ukuvuselela (Gauteng to Eastern Cape corridor automotive railway development), 5 billion, to create 3,794 jobs
#The Refurbishment of health facilities, R16 billion, with a total number of 101, 082 jobs.
# Schools projects, R8, 5 billion, to create 29, 721 jobs.
#Eskom Mossel Bay Gas, R30 billion, to create 54, 511 jobs.
#Eskom Tubatse Pumped Hydro, R35, 8 billion, to create 61, 034 jobs.
#Rooiwal Phase 2 Waste Water, R35, 8 billion, to create 61, 034.
#Amathole Water Bulk Supply Augmentation, R5, 5 billion, to create 6, 641 jobs.
#Nkomazi SEZ (Special Economic Zone) , R8, 4 billion, to create 28, 548 jobs.
#Namakwa SEZ (Special Economic Zone), R32, 7 billion, to create 94,131 jobs.
IMF research on public spending
Article from the International Monetary Fund blog written by Dr Mariano Moszori (2021) says research shows that when governments spend on infrastructure, they create many new jobs.
Moszori said to measure the direct employment effect of $1 million in infrastructure spending by country income group and sector, a 19-year dataset was used, of over 5,600 construction companies from 27 advanced economies and 14 emerging market economies.
Moszori’s observation is job creation depends on labor mobility. This refers to how easy it is to move across companies within sectors firstly, and then on labor intensity or defined as the labor effects of supply chain in a sector.
About 35 jobs are created in water and sanitation per $1 million of additional investment, in an emerging market economy, with high labor mobility and high labor intensity.
In a country with low labor mobility and low labor intensity, only 8 jobs are created.
The impact could be higher for green investment, in part because many jobs in renewables do not require much education beyond high school and have low barriers to entry. Per $1 million invested, around 5–10 jobs could be created in green electricity, 2–12 jobs in efficient new buildings like schools and hospitals, and 5–14 in green water and sanitation through efficient agricultural pumps and recycling.
Investment in research and development can also create jobs—though mostly, if not exclusively—for high-skilled workers. Despite it being a much smaller component of public investment—mostly to government institutions and higher education—around 4 jobs are created in R&D per $1 million invested.
These results indicate that public spending on infrastructure can make a meaningful contribution to job creation. Overall, one percent of global GDP in public investment spending can create more than seven million jobs worldwide through direct employment effects alone.
Mariano Moszoro is a Senior Economist in the IMF’s Fiscal Affairs Department. His work experience and research focus on public finance, political economy, and infrastructure development. Dr. Moszoro holds a Ph.D. and habilitation (French HDR/US tenure equivalent) in Economics from the SGH Warsaw School of Economics. In 2005-2006, he was Deputy Minister of Finance of Poland and Chairman of the state development bank BGK. In 2009-2011, Dr. Moszoro interned as a post-doctoral fellow at UC Berkeley-Haas under Nobel laureate Oliver E. Williamson. Dr. Moszoro has published in top journals and held academic positions at Berkeley, Harvard, GMU, and Paris.
Picture: Claus Water Specialists