R100bn boost for road maintenance: a step towards a safer, stronger SA

Cape Town - Finance Minister Enoch Godongwana's decision to uphold the South African National Roads Agency's (SANRAL) R100 billion road maintenance budget is a crucial step in addressing South Africa's deteriorating infrastructure. Poor road conditions are a leading contributor to vehicle accidents, costing the economy over R205 billion annually equivalent to 2.74% of GDP.

This is according to Troy van der Westhuyzen, Managing Director at MVIA Insure who says, "This funding will double the number of kilometres under active resurfacing contracts from 950km in 2024/25 to 2,000km in 2025/26. It will also enable SANRAL to maintain its 24,000 km road network, doubling the length of strengthened and improved roads from 200km in 2024/25 to 400km by 2026/27. Additionally, it will allow provincial roads departments to reseal more than 16,000 lane-kilometres of roads. However, it remains below the estimated R197 billion backlog, making long-term investment crucial.

He points out that improved roads have wide-reaching economic benefits. "Beyond reducing road fatalities, they can drive sector growth as poor infrastructure contributed to the transport, storage, and communication sector's sluggish 1% growth last year."

"Well-maintained roads could cut transport times, reduce delays, and ease congestion, enabling faster delivery of goods and services, thereby boosting productivity and demand," explains van der Westhuyzen. "Moreover, upgraded infrastructure would reduce the cost of vehicle upkeep, lessen fuel consumption, and decrease wear and tear on trucks and other vehicles, leading to lower operational expenses for businesses. These benefits could enhance profitability and encourage greater investment in the sector."

He adds that the entire motor industry ecosystem, including dealerships, insurers, and financial institutions, also stands to benefit, as poor road conditions drive up vehicle maintenance costs, increase insurance claims, and dampen consumer confidence in buying vehicles. "Investment in infrastructure improvements is critical for stimulating sales and providing safer, more cost-effective driving conditions."

"Better road infrastructure also has far-reaching ripple effects, including job creation in construction and engineering, increased tourism through better access for visitors, and enhanced trade and investment opportunities, with efficient logistics networks positioning the country as an attractive hub for global business," notes van der Westhuyzen.

"This funding marks a step in the right direction, but sustained, strategic investment is needed to fully modernise South Africa's roads, improve road safety, and unlock economic potential," he concludes.