Security challenges cast shadow on infrastructure investment drive, says Fitch

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Problems such as organised crime undermine regulatory changes intended to boost investment

US-based Fitch Solutions says physical security challenges, particularly organised crime groups in construction and infrastructure, are the main risks impeding investment in SA and that this proliferation will undermine regulatory changes in the country as it seeks to boost investment. said practical security challenges “cast a shadow” on updated infrastructure investment policy.Fitzpatrick

downgrade is a result of the country’s slow pace to reforms in terms of improving the much needed governance at state-owned entities , as well as its failure to address the worsening infrastructure constraints. Fitzpatrick added that frequent reports of intimidation and violent attacks affecting construction projects, while the capability of state security forces to guard against these risks is limited, largely due to corruption risks and underfunding.

Other risks mentioned include rolling electricity blackouts, SOEs’ uncertainty as well as political risk.Eskom’s rolling blackouts remain the main strategic threat to SA’s economic performance impacting all sectors, including construction.

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