39. Unlocking infrastructure investment in South Africa
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At the end of 2025, the estimated size of South Africa’s savings pool stood at a substantial R15.8 trillion, yet the country continues to face a significant infrastructure investment shortfall. Some policymakers might view this dichotomy as evidence that Regulation 28, which governs how retirement funds may invest, should be adjusted to lower the offshore allowance and direct more savings towards local infrastructure.
In the latest episode of The Allan Gray Podcast, portfolio manager Thalia Petousis, economist Sandy McGregor and ESG analyst Raine Adams argue that SA’s infrastructure underinvestment is not the result of a shortage of money, but the shortage of opportunity. The private sector continues to show a willingness to fund viable projects. They point to the roughly R350bn of capital that has been invested in the local Renewable Energy Independent Power Producer Procurement Programme projects since 2022 – the same year that the offshore allowance was in fact increased.
The discussion underscores that addressing the country’s infrastructure investment shortfall is less about changing Regulation 28 and more about making progress on the reform agenda, instituting sensible public policies, raising governance standards and increasing the number of opportunities worth investing in.
In the latest episode of The Allan Gray Podcast, portfolio manager Thalia Petousis, economist Sandy McGregor and ESG analyst Raine Adams argue that SA’s infrastructure underinvestment is not the result of a shortage of money, but the shortage of opportunity. The private sector continues to show a willingness to fund viable projects. They point to the roughly R350bn of capital that has been invested in the local Renewable Energy Independent Power Producer Procurement Programme projects since 2022 – the same year that the offshore allowance was in fact increased.
The discussion underscores that addressing the country’s infrastructure investment shortfall is less about changing Regulation 28 and more about making progress on the reform agenda, instituting sensible public policies, raising governance standards and increasing the number of opportunities worth investing in.
