Powerful and politically connected “construction mafias” are deterring investors and stalling crucial infrastructure projects needed to boost South Africa’s economy, the country’s new public works and infrastructure minister stated on Friday.
After taking office last month in South Africa’s new coalition government, Dean Macpherson is now responsible for aiding in President Cyril Ramaphosa’s initiative to transform the country into a hub of construction.
In his inaugural policy speech to the new parliament, President Cyril Ramaphosa emphasized that inclusive economic growth would stem from significant infrastructure investment.
However, Dean Macpherson noted in an interview that the state must first address the rampant criminal gangs that invade construction sites to make this vision a reality.
“It’s a significant threat,” he said. “It physically halts ongoing projects and creates a barrier to entry for the private sector. Stoppages and cost overruns eat into their margins.”
“Why would you invest capital in a project that might be indefinitely stalled and requires additional funds to keep gangsters away from your site?” he stated.
According to a 2023 report by the Cape Town-based Inclusive Society Institute, criminal groups in South Africa’s construction sector first appeared in the KwaZulu-Natal province about a decade ago and have since spread to all provinces.
These groups typically overrun construction sites, demanding payments or shares in development projects, and using threats or force to get their way, according to the report.
Macpherson, who previously served as the provincial chairperson for KwaZulu-Natal for the Democratic Alliance (DA), noted that these groups also maintain close connections with corrupt politicians.
Macpherson announced plans to meet with various state officials next month to develop a national strategy for addressing the gangs, emphasizing that Ramaphosa has highlighted this issue as a priority.
“Many institutional investors have expressed concerns that the biggest risk they face is investing in projects that may be halted indefinitely due to these issues.”He remarked
He mentioned that his department is exploring new funding models to draw in private-sector investment and that the Treasury is working on reforms to public-private partnership regulations to facilitate this.
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