With government and business both looking to infrastructure development as a catalyst for economic recovery, there is consensus on one thing: cooperation will be needed to kick off building projects before growth becomes a reality.
The Steel and Engineering Industry Federation of SA (SEIFSA) agrees that a pro-business agenda was clear in President Cyril Ramaphosa's State of the Nation Address (SONA) on Thursday evening, and it is hopeful that government's plans to invest in infrastructure development – and support localisation – will help the beleaguered steel and engineering sector recover.
It is also hoping for the creation of some 200 000 downstream jobs through manufacturing and infrastructure development projects.
Steel and engineering has a knock-on effect on other industries, such as mining and manufacturing, but some 660 000 jobs were lost in the sector – which is also still recovering from a bruising three-week strike last year – in the space of just one quarter in 2021.
During his SONA, Ramaphosa said government would prioritise infrastructure projects to support economic growth and better livelihoods, especially in energy, roads, and water management.
"The Infrastructure Fund is at the centre of this effort, with a R100 billion allocation from the fiscus over 10 years. The Infrastructure Fund is now working with state entities to prepare a pipeline of projects with an investment value of approximately R96 billion in student accommodation, social housing, telecommunications, water and sanitation and transport," said Ramaphosa.
He added that the Infrastructure Fund would collaborate with state entities to prepare projects worth R96 billion in areas that include student accommodation, social housing, telecommunications, water and sanitation, and transport.
"Government will make an initial investment of R1.8 billion in bulk infrastructure, which will unlock seven private sector projects to the value of R133 billion," Ramaphosa said.
SEIFSA CEO Lucio Trentini told Fin24 on Friday that the 2021 steel and engineering wage deal gave the steel and engineering sector a two-and-a-half year reprieve from the instability that comes with industrial actions and turbulent talks, giving the sector room to focus on infrastructure.
"Last year it was settling the strike that brought the sector to its knees. In October, our industry wage talks collapsed, and we had a three-week strike. Thankfully, with a lot of understanding and compromise, we brought that to an end and have a two-and-a-half year window of industrial peace and stability," says Tentini.
Trentini says SEIFSA welcomed Ramaphosa's call for a comprehensive social compact, and it agrees with sentiments, vision and hopes that the president spoke to - but for now, it wants delivery, implementation and action, specifically in relation to the promised infrastructure spend.
Trentini said the R133 billion alluded to at SONA - if this materialises - will make a substantial and material difference to employers and employees in the metals and engineering industry.