South Africa’s nascent infrastructure boom is facing significant hurdles due to the actions of powerful criminal gangs, according to Dean Macpherson, the country’s newly appointed Minister of Public Works and Infrastructure. The so-called “construction mafias” are reportedly deterring investors and stalling crucial infrastructure projects essential for economic growth.
Macpherson, who assumed office last month in the new coalition government, is charged with implementing President Cyril Ramaphosa’s ambitious plan to revitalise the country’s infrastructure. Ramaphosa’s vision includes extensive investment in construction to drive inclusive economic growth. However, Macpherson highlighted that these criminal elements pose a substantial threat to this goal.
“These gangs are a major obstacle,” Macpherson stated. “They physically halt ongoing projects and create barriers to entry for private investors. The risk of project stoppages and cost overruns significantly eats into profit margins, making it less attractive for investors to commit their capital.”
The issue of construction mafias has been present for over a decade, initially emerging in KwaZulu-Natal and subsequently spreading throughout South Africa. According to a 2023 report by the Cape Town-based Inclusive Society Institute, these groups typically invade construction sites, extorting money or stakes in projects through violence or intimidation.
Macpherson pointed out the close connections between these criminal gangs and corrupt politicians, which further complicates the situation. He announced plans to meet with various state actors next month to devise a national strategy to combat these gangs. The issue has been flagged as a priority by President Ramaphosa, with the government also exploring new funding models to attract private sector investment. Additionally, reforms to public-private partnership regulations are being considered to address the problem.
“The feedback we have received, especially from institutional funders, indicates that this is the biggest risk to their investments,” Macpherson said. “Projects may be halted indefinitely, which discourages investment.”
The South African government’s response aims to restore confidence in the country’s construction sector and to facilitate the necessary infrastructure development to support economic growth.
