Helping South Africa to build better

Related pages: South Africa homepage | MDG 8: Aid, trade, growth and global partnership

Poor infrastructure and inadequate infrastructure services are among the major factors that hinder Africa's development. Transportation costs in Africa are the highest of any region in the world.

This is why, since 2003, DFID has been helping South Africa - the continent's largest economy - to improve vital infrastructure which crumbled during the years of Apartheid.

DFID has helped get infrastructure plans off the ground by working with the government to improve the efficiency of  the State-Owned Enterprises (SOEs) which control ports, railways and electricity. It also helped strengthen the capacity of industry regulators and government departments responsible for overseeing SOEs.

• Engineering Africa's growth (Blog from The Guardian)
• Corporate governance and state enterprises (Blog from the World Bank)

Improving efficiency

Image courtesy of National Ports Authority

Since 2003, DFID's Support to the Restructuring of Public Enterprises, South Africa (SRPESA) project has helped the South African government to focus on restructuring the energy, transport (rail, air transport and ports) and the telecommunications sectors.

The government wants the poor to benefit from increased access to services at affordable prices. And while it has decided to privatise State-Owned Enterprises (SOEs) in some sectors, it will keep SOEs in key strategic sectors in state hands. Increasing investment in these sectors and improving their efficiency is vital to South Africa's attempts to increase economic growth and reduce poverty.

Portia Molefe, Director General, South African Department For Public Enterprises (DPE):

"DPE's capacity has improved greatly, enabling us to contribute more successfully to the realisation of the Government's developmental objectives. With the help from the SRPESA programme, we are now more effective in prioritising and getting implemented activities which will benefit the poorest in our society, in key sectors such as energy and transport."

Some examples of project successes:

• Helping South Africa plan to plan for and meet rapidly rising demand for electricity and avoid future energy shortages
• Helping to shape the electricity regulatory and pricing environments to protect consumers, particularly the poor
• Helping to increase telephone coverage for the poor
• Helping to turn the losses of the government's transport holding company (airlines, ports and railways), TRANSNET into a profit, so that it can plan for and finance infrastructure investments, which is vital to South Africa's growth strategy
• Strengthening the electricity and communications regulators, the Department of Public Enterprises and Parliament to ensure that there is an appropriate level of oversight of the activities of SOEs.

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Key facts

• The legacy of Apartheid policies meant that when full democracy was introduced in 1994 South Africa's new leaders were presented with a monumental social and economic challenge. Out of a population of 40 million, half of all households were below the poverty line, 12 million lacked clean water supply and 23 million had no access to electricity.
• Education and health services had been set up mainly to benefit white communities. The same was true of transport infrastructure which had, in any case, suffered from years of neglect. This in turn, had an impact on South African industry and growth.
• The strong lead given by the South African government has been critical to the success of the project. The Department of Public Enterprises (DPE) identifies which interventions the project should finance and works with other government departments and the UK project managers to write terms of reference. The lead consultants have been based at DPE itself and have played the role of facilitators rather than doing the work for their counterparts. A key part of the interventions has been to build the capacity of government departments, Parliament and regulators to oversee the operations of privatised SOEs and those SOEs which are remaining in government hands.
• Growth, trade and investment are core elements of DFID's new regional plan for Southern Africa

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