Johannesburg, 12 March 2025 – The 2025 Budget is presented against an uncertain global and difficult domestic economic environment, wherein the Minister had to strike a fine balance within the confines of a toxic combination of rising expenditure and declining revenues.
Of most notable interest for the Federation is the definitive date of 1 June 2025, which has been set for the implementation of the new regulations on public-private partnerships (PPPs). SEIFSA has long been calling for the fast tracking of the implementation of these regulations since there were initially flagged by National Treasury 12 to 18 months ago. The regulations which will reduce the procedural complexity of undertaking PPPs, create capacity to support and manage PPPs and importantly create clear rules for managing unsolicited bids. These unsolicited bids are important because they have the potential to decentralise and widen the project list of projects that are critical, but typically fall under the radar. Historically, in a centralised planning environment, only the large headline grabbing projects receive the necessary attention, however, failures of infrastructure that requires the most urgent attention occur at localised levels.
Moreover, the easing of the regulatory burden that projects of R 2 billion and less will also fast track the execution of these important and localised projects.
The PPP regulations also make provision for national departments to establish sector-specific PPP units. These units will drive private sector participation (PSP) at sectoral level and in this regard, allowing for the packaging of projects that are specifically steel intensive in the water, logistics and electricity sectors.
It is also noteworthy that of the R1.03 trillion of public sector infrastructure spend that will be spent over the medium term, approximately half (R410 billion) will be channelled through the state-owned entities, renewing once again, SEIFSA’s call of the very important strategic localisation agenda that can be achieved through these SOE’s. The demand from these SOE’s presents a massive opportunity to drive a mega-scale industrialisation project for the metals and engineering sector.
Broadly, the federation commends the Minister for keeping a firm hand on a prudent fiscal position despite many competing objectives levied against the national purse.
