London - The British Chamber of Business in Southern Africa (BCBSA) and its strategic partner Hoffmann Reed joined forces with the South African Chamber of Commerce in London to host an official trade delegation from Infrastructure South Africa (ISA) at South Africa House in London on 28 September 2022 alongside UK private sector members, which included the UK and SA banking fraternity.

Through a statement released on Thursday 29 September, the BCBSA stated that the official delegation was led by Prof Kgosientsho Ramokgopa on behalf of Minister Patricia De Lille who is the Executive Authority overseeing the ISA Programme. The delegation attended the event with the aim of fostering new partnerships and exploring opportunities with the UK private sector, and to build a sustainable infrastructure development pipeline following trade barriers between the two countries being lifted.

According to Leon Ayo, President at the British Chamber of Business in Southern Africa, initiatives such as these are critical in driving South Africa’s infrastructure development plan forward. “We want to bring infrastructure investment and expertise to South Africa to address our immediate challenges whilst growing bi-lateral trade between our nations and regions. Our aim is to create opportunities for collaboration with partners who have the expertise to get complex infrastructure projects, particularly in the green energy sector, off the ground.”

Infrastructure is a critical need across the African continent. According to the African Development Bank, the continent’s infrastructure financing needs will be as much as $170 billion a year by 2025, and there is an estimated gap of around $100 billion a year.

South Africa's National Infrastructure Plan (NIP) 2050 has identified the energy and water sectors as the two short-term priority sectors, with transport following in the medium term. According to Intellidex, South Africa will require R500 billion in private investment to end the power cuts that are crippling our economy by the start of 2025. And a further R175 billion of investment will be required to expand its power grid over the next decade.

Adam Ginster, Partner at Hoffman Reed – a global management consultancy specialising in executive search - echoes Ayo’s sentiments and explains that bringing in the niche expertise required for infrastructure projects has many benefits for South Africa. “Importing the skills required to implement and operate these highly intricate projects not only accelerates infrastructure development that will elevate social wellbeing for South Africans, but it creates a platform from which to transfer essential skills to locals.”

Ayo points to opportunities for private equity deals to help bolster the infrastructure investment shortfall. The Southern African Venture Capital and Private Equity Association (SAVCA) last year reported infrastructure as a popular sector in the private equity (PE) environment. “The organisation’s 2021 Private Equity Industry Survey showed that infrastructure accounted for 22.8% of the total cost of investments for the 2020 period. The report further showed that infrastructure-focused PE funds have grown exponentially in recent years, with funds under management growing from 14.7% in 2018 to 33.4% in 2020.”

“It’s these kinds of deals that we hope to be able to facilitate by opening up trade avenues, assisting firms to successfully deploy their operations in Southern Africa by helping them navigate the regulatory environment and by creating the space to connect business with opportunities,” explains Ayo.

Commenting on the event, minister De Lille said that the UK trip was a success, and that ISA has high hopes for accelerated growth arising from new partnerships coming to fruition. “We are confident that we are making positive strides in meeting ISA’s objectives to support Government’s drive to reignite the South African economy and place it on a sustainable and inclusive broad-based growth path.”

“Our goal at BCBSA is to facilitate as many introductions and deals as possible in order to catalyse real economic growth. Accelerated infrastructure development is key to driving both economic and social growth for South Africa. Essential infrastructure improves the lives of ordinary citizens and together with construction is an important sector for job creation. To ensure we are playing our part in seeing viable deals come to fruition, we will host a follow up event in Johannesburg on 18 October,” concludes Ayo.