State has the money to fund infrastructure – Gordhan

South Africa has the money to spend on the infrastructure projects in the five regions outlined by President Jacob Zuma in his State of the Nation Address tonight, the Minister of Finance Pravin Gordhan said.

“We already know that for the past five or six years that for every three-year period we have had something around R800 billion to R900 billion being spent, largely by our state-owned enterprises (on infrastructure).

“So we’ve demonstrated the ability to bring resources in which is what will be required to get these projects going,” Gordhan told BuaNews, stressing that these key infrastructure projects would be developed over a number of years.

Among other things, the projects would help develop better economic links between outlying areas and the main urban centre and to make it easier for companies to export and do business locally, he said.

“If we get this right it means that many areas of the country will have a heightened level of economic opportunity and there will be all sorts of job opportunities and there will be opportunities for people to manufacture the things that go into the investment in the infrastructure development that has been outlined,” he said.

Gordhan also defended the state getting more involved in the economy.

“You know if the state didn’t get involved in all the economies of the world, particularly the major ones, since in 2008 you would have had no economy or country left,” he said, pointing out that it was the state backed by tax-payers’ money that helped save banks in the 2008 financial crisis.

“So the story about the state getting too involved is an old story, what we need is the right balance,” he pointed out.

Speaking on the night, the leader of the opposition Lindiwe Mazibuko, although welcoming the announcement by Zuma of the infrastructure projects, said it was not clear from where the funding for the infrastructure projects outlined by Zuma would be sourced.

“In fact a quick look actually shows that we are about R300 billion short, so I’m curious to see how that will be dealt with in the budget,” said Mazibuko.

Her concern on where the funding would come from for the infrastructure projects was echoed by Cope leader Mosiuoa Lekota, who added that corruption in the procurement system also risked raising the cost of these projects. – BuaNews