Infrastructure in South Africa: Who is to finance and who is to pay?

Figures & data

Figure 1: Shifting view on the ‘publicness’ of infrastructure

Table 1: Public sector infrastructure expenditure and estimates, 2005/06–2011/12 (R million)

	2005/06	2006/07	2007/08	2008/09	2009/10	2010/11	2011/12
General government	48 559	57 869	73 426	100 442	118 288	128 098	144 219
Public enterprises	22 145	25 736	56 765	90 192	119 585	131 335	145 842
Total	70 704	83 605	130 191	190 634	237 873	259 433	290 061
Source: National Treasury (2009b).

Table 2: Public sector borrowing requirement, 2005/06–2011/12 (R million)

	2005/06	2006/07	2007/08	2008/09	2009/10	2010/11	2011/12
General government	–207	–15 979	–23 351	33 097	94 312	83 405	67 660
Public enterprises	–6858	11 277	11 182	57 362	91 434	90 069	90 103
Total borrowing	–7065	–4702	–12 169	90 459	185 746	173 474	157 763
Source: National Treasury (2009b).

Table 3: Paying for versus financing of infrastructure spending

		Who pays
		Tax payer	User		Donor
			As per benefit	Cross-subsidisation
Who finances		Column 1	Column 2	Column 3	Column 4
Tax payers (cash)	a	Financed and paid for by tax payers (as if public consumption)	Financed by tax payers; users pay (benefit approach)	Financed by tax payers; certain users subsidise others (distributional)	Financed by tax payers; donors bear part of cost (distributional)
Lenders to government or government enterprises (loans or guarantees)	b	Loan financed by private investors; tax payers repay loans over time (inter-generational equity; allocative efficiency)	Financed by private investors; users repay loans (inter-generational equity; allocative efficiency)	Financed by private investors; users subsidise others (distributional)	Financed by private investors; sponsors pay (subsidise tax payers or users)
Private investors (equity, using internal or external funding)	c	Equity financed by private investors; tax payers pay to effect return on investment (public–private partnership) (equity; allocative efficiency)	Equity financed by private investors; users pay to effect return on investment (benefit approach; allocative efficiency)	Equity financed by private investors; users pay and subsidise others to effect return on investment (distributional)	Equity financed by private investors; donors pay (subsidise tax payers or users)
Development agencies (loans)	d	Loan finance by development agencies; tax payers pay to effect debt service	Loan finance by development agencies; users pay to effect debt service	Loan finance by development agencies; users subsidise others (distributional)	Financed and paid for by development agencies (equity)
Donors (grants)	e	Grant finance reduce cost to tax payers	Grant finance reduce cost to users	Grant finance reduce subsidisation by users to other users	Grants by sponsors (financed and paid for) (philanthropic; equity)

National Treasury . 2009b . “ Chapter 3: Fiscal policy ” . In In 2009 Budget Review , Pretoria : National Treasury .

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