Required infrastructure investments

Bottom-up investment estimates for the sector suggest a total requirement of about USD 400 billion over the next 3 decades in the following areas:

  • The Agriculture sub-sector accounts for about USD 138 billion of the total required investment. This translates into an average annual expenditure of about USD 4.5 billion, up from current USD 500 million. However, agriculture has substantial overlap with other areas such as transportation and water, and the corresponding investment amounts are not 100 per cent separable. Hence, a significant part of the total amount is also included elsewhere – for example, about USD 15 billion is attributable to irrigation, which is also part of the water investment requirements;
  • Required infrastructure investments for the Water sub-sector amount to about USD 206 billion. This translates into yearly investments of about USD 4.2 billion in the first decade, USD 5.8 billion in the second decade, and USD 10.5 billion in the third decade. The major portion of this amount (about USD 110 billion) is accounted for by investments into water supply, water treatment and sanitation infrastructure. The remaining required investment volume is split among infrastructure deployments for irrigation, dams with hydropower components, rainwater harvesting systems, and drainage systems;
  • The Mining sub-sector requires investments of about USD 56 billion over the next three decades. This is equivalent to an average annual spend of more than USD 1.9 billion, up from current modest amount of about USD 30 million, though this is still a little fraction of total industry capital expenditures (capex) in mining countries like South Africa. The vast majority of these capex will be privately borne. The national focus should be to set the stage and ensure favourable framework conditions (legal, political, supporting infrastructure such as transportation) in order to attract such large-scale private investments.