South Africa has had a tough few years. Surviving state capture, infrastructure delays and setbacks, the rise of the construction mafia, South Africa’s ongoing water crisis, and loadshedding. These existential problems are set against a struggling economy, political confusion, and the threats of climate change. 

Like all of us on New Year’s Day, South Africa deserves a “new year, new me” moment, and 2025 looks to be a good year for the country. 

The tail end of 2024 saw a mixed bag in terms of construction projects with the Provincial Construction Pipeline Model (PCPM) contracting by 12%, but there was area-specific growth in the North West (20.5%) and Northern Cape (17.9%). The public sector shows a 30% uptake in projects awarded while the private sector shows a 19% rise in approved projects. According to construction market experts, Industry Insight South Africa’s construction sector displays resilience amidst the shifting trends. 

2025: A year of focus

The Government of National Unity has marked infrastructure as the central area on which South Africa’s economic recovery will be built. Key water and transport projects are expected to be completed in 2025, bringing stability to two of South Africa’s most precarious sectors. 

According to the Infrastructure Book  South Africa is investing R158.54 billion in the sector in 2025 which is expected to stimulate the economy, create jobs, and address the ailing state of service delivery. 

Energy

South Africa’s energy sector is in the midst of change. Persistent loadshedding saw its end in 2024, but the country must continue its Just Energy Transition as well as invest in its coal energy to secure the energy needs of South Africa.

Eighteen key energy projects, valued at R38.32bn, including renewable energy advancements like the Upington Aries-Upington 400kV line and the Erica MTS + Phillipi-Erica 400kV line projects, slated for early procurement.

The Komati Battery Energy Storage and Medupi Flue Gas Desulphurisation initiatives are also crucial in integrating cleaner, more reliable energy sources.

These projects promise not only improved grid stability but also an estimated 144,000 job opportunities and R58.72bn in gross value added (GVA) to the economy.

The suspension of load shedding has made the most tangible impact on the recovering economy so far, and with the return of Medupi (Unit 4), Kusile (Unit 6), and Koeberg (Unit 2) in the coming months Eskom hopes to end load shedding completely by March 2025.

Water

South Africa is a water-scarce country, and adding climate change to the mix means that addressing and future-proofing its water security needs is not just an economic duty but a humanitarian one. 2025 sees a R32 billion investment to enhance the country’s supply systems including the uMkhomazi Water Scheme aims to increase the Mgeni Water Supply System’s capacity by 220,000,000m3 annually, directly supporting urban and rural communities. Another project in the works is the Pilanesberg Bulk Water Supply Scheme Phase 2 which is designed to ensure reliable water access in Limpopo and the North West provinces. 

As Gauteng experiences supply-side issues, Rand Water and Johannesburg Water are working on upgrades, maintenance, and demand reduction to secure water for the country’s economic hub.

Transport

Of the R132 billion investment, 88 billion is allocated to transport. There are 132 transport projects spanning roads, railways, ports, and airports. Roads are the key focus comprising 123 of the 132 projects. Connecting people to places and ensuring safe travel is a priority for South African infrastructure. 

Railways have suffered for years in South Africa but the Botswana Rail Link- aiming to facilitate cross-border trade could be a turning point. 

Airports are also receiving attention with terminal expansions at OR Tambo International and Cape Town International Airports to accommodate increasing passenger demand.

These projects are expected to create 860,000 jobs and inject significant tax revenues into the economy.

Transnet has been a thorn in South Africa’s side, but the current reforms including a 25-year contract with private companies to help fix its ports prove a more positive outlook for the state-owned enterprise in 2025. 

The future of South Africa

Currently, South Africa’s expected GDP growth sits between 1.5 and 2.1%, which would be a stepping stone to the golden 3% needed to significantly improve the economy. The investment in infrastructure and focus on water, transport, and energy follows through with South Africa’s 2050 plan where the country is less coal-reliant and more adept at dealing with climate change and growing sustainably.