DBSA's infrastructure solidarity push

As the world faces a $15 trillion infrastructure investment gap by 2040, the Development Bank of Southern Africa believes that South Africa holds the key to bridging this gap through solidarity-based investment strategies. In a recent interview with Zeph Nhleko, Chief Economist at the DBSA, key insights were shared on the importance of solidarity investment models and the role they play in addressing developmental gaps in various sectors. One of the critical issues highlighted during the interview was the urgent need for sustainable practices in the face of climate change. Nhleko emphasized that companies are increasingly focusing on protecting the environment and supporting societies, especially in regions where developmental gaps still persist. For instance, in South Africa, significant challenges exist in sectors such as electricity, water, roads, and ICT, where millions of people lack access to basic services. This underscores the importance of investing in infrastructure that not only advances economic growth but also uplifts communities. Nhleko further discussed the concept of solidarity investment, highlighting its emphasis on mutual cooperation and shared responsibility. While solidarity investment is not a new concept in Africa, its application in modern investment practices is proving to be instrumental in creating sustainable and resilient infrastructure. By prioritizing the involvement of local communities, solidarity investment models ensure that societies benefit directly from these investments. The conversation also delved into the staggering $15 trillion infrastructure investment gap projected globally by 2040. Nhleko stressed the need for a significant scale-up in investment efforts to meet this gap. At the DBSA, an estimated infrastructure investment need of around 10 trillion rands has been identified to achieve Sustainable Development Goals (SDGs) by 2030-2035. This calls for a swift transformation in existing finance models to facilitate large-scale infrastructure development. Moreover, Nhleko shed light on the DBSA's integrated municipal approach, which aims at fostering collaboration between the public and private sectors, investors, and communities. By working closely with municipalities at the district level, the DBSA is spearheading projects that not only address immediate infrastructure needs but also focus on long-term sustainability and maintenance. Through this approach, the DBSA has forged partnerships with several districts, showcasing a comprehensive model for infrastructure development. In a bid to navigate the challenges faced by municipalities, Nhleko emphasized the importance of building strong partnerships and providing tailored support to address the diverse needs of each municipality. Despite the complexities of operating within the municipal space, the DBSA has managed to cultivate successful collaborations, evidenced by the timely payments from municipalities under their purview. By leveraging a network of partners and engaging in non-lending activities, the DBSA aims to bolster the capacity of municipalities and drive holistic development initiatives across South Africa. With a renewed focus on solidarity-based investment models and collaborative approaches to infrastructure development, South Africa stands poised to lead the way in bridging the global infrastructure gap. By embracing sustainable practices, fostering community engagement, and leveraging innovative financing mechanisms, the country is on track to drive inclusive growth and address critical developmental challenges.