
On one of South Africa’s busiest freight routes, men and women dressed in blue overalls, safety helmets, and reflective jackets are transforming the landscape. As these workers maneuver around cement trucks and construction scaffolding, bulldozers are widening the road that links Gauteng province to the eastern port city of Durban.
This scene is being mirrored across the country, as investors pour money into the construction industry. They are banking on President Cyril Ramaphosa’s multi-billion-rand plan to update South Africa’s old infrastructure, which is expected to trigger a construction boom. Despite ongoing challenges stemming from bureaucratic red tape and criminal activity impacting the sector, industry experts are optimistic about the potential for advancement.
ADVERTISEMENT
CONTINUE READING BELOW
“I have great confidence in the construction sector,” Tana Mongwe, an analyst with Old Mutual Investment Group in Cape Town, stated during a summit in September. Four months later, her outlook is unchanged. “Last year, construction companies recorded unprecedented order intakes,” she noted in a Bloomberg interview.
Ramaphosa’s initiative, announced even before his re-election, includes government investments amounting to $88 billion (R1.66 trillion) in public infrastructure by 2030, along with an additional $177 billion (R3.32 trillion) from private investors. Construction orders started to increase almost immediately following his return to office last May as part of a market-friendly coalition.
Read: Ramaphosa announces massive infrastructure investment plan
These developments are having a positive impact on the broader economy. In the third quarter alone, the construction sector added 176,000 new jobs, bringing total employment in the field to around 1.3 million and raising the national employment rate from 32.1% to 33.5%.
For some industry veterans, the current climate is reminiscent of the period leading up to the 2010 World Cup in South Africa when public investment in infrastructure surged. Paul Greyling, a construction manager who worked on the international airport in Durban, recalled, “While the rest of the world was facing a recession, South Africa thrived due to the push for infrastructure.”
However, after the tournament, construction activity fell sharply, and the sector has faced numerous challenges that linger today. A myriad of bureaucratic processes complicate visa approvals for foreign firms, the navigation of procurement frameworks, and the securing of environmental clearances. Although some delays have been mitigated, red tape continues to impede construction projects, according to Sanele Mazibuko, chief operating officer of Umngeni Water, a state water management agency.
“The time taken to finalize public-private partnerships is excessive, causing significant slowdowns in infrastructure development,” he remarked.
Extortion is another grave concern. Since 2019, the South African Department of Public Works and Infrastructure has reported that criminal activities have halted over 180 construction projects nationwide, collectively valued at $3.4 billion. Since construction profit margins are typically thin, Mongwe pointed out that such delays “can profoundly impact projects and overall company profitability.”
While some work stoppages are driven by communities seeking jobs, others stem from criminal groups demanding a portion of profits, often without any real engagement in the projects.
Read: Draft regulations to address construction mafia criminality
ADVERTISEMENT:
CONTINUE READING BELOW
Greyling recounted how a project he was part of to upgrade a water treatment facility in Hammanskraal, just north of Johannesburg, faced derailment due to extortion attempts by armed groups. This led to delays of approximately a year and a half, contributing ultimately to a tragic cholera outbreak.
While larger firms can often protect themselves against such threats—by enhancing security or submitting to demands—smaller companies frequently lack those resources.
Moreover, a more pressing question looms over South Africa’s construction revival: are Ramaphosa’s goals sufficiently ambitious? Estimates indicate that addressing the country’s infrastructure investment gap will necessitate between R4 trillion and R6 trillion, roughly 30-35% of GDP spending by 2030.
For analysts like Mongwe, this presents a considerable opportunity. “National infrastructure spending remains relatively low at around 15% of GDP,” she observed, highlighting that this is nearly 10% lower than comparable countries.
Read: Ramaphoria is back as government targets 3.3% growth by end 2025
However, she added, “there is still significant room for improvement.”
© 2025 Bloomberg
Stay informed with Moneyweb’s thorough finance and business news on WhatsApp here.