How DBSA helps to build a rural economy that grows

The persistency of poverty and inequality in South Africa continues to hit the most vulnerable parts of the country, such as the rural areas. The people in these areas have limited access to basic resources such as electricity, water, food, quality healthcare, education, employment and entrepreneurial opportunities. For a shift to take place and a better future to be built for the many people living in these communities, rural development has to take centre stage. 

Rural development involves strategic policies, plans and investments created specifically with the goal of developing the rural communities. This can be done through infrastructure in housing, education, health and other related industries which can play a role in boosting productivity in these communities. When there are sufficient infrastructure funding and access to such infrastructure, it raises the potential for new opportunities to become available. 

Rural development is inherently linked to the national economy and how its growth path is shaped. This is the reason why the Department of Rural Development and Land Reform has, over the years, established several projects and programmes aimed at providing support to the rural economy and rural infrastructure development.

Development plans in action

The progress has been impacted by a number of hurdles. Now with the current pandemic, more challenges of rural development in Africa are expected. However, through the challenges, new and innovative ways on how to develop rural economies can be born. 

According to the United Nation’s 2030 transformation agenda for sustainable development “support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning.” 

The National Development Plan 2030 was formulated with strategies for sustainable rural development to ensure that rural communities have access to opportunities and participate in the revival of the rural economy. The plan also emphasises inclusive rural development through integrated land reform, with the support from the agriculture, mining, tourism and other industries. 

As the Development Bank of Southern Africa, it is our role to mobilise financial and other resources from the national and international private and public sectors for sustainable development projects and programmes in South Africa, the Southern African Development Community (SADC) region and the rest of the African continent. Rural development is part of our wide portfolio. Our work in rural communities through infrastructure projects ensures that we promote growth, which is both inclusive and sustainable in nature. 

Through our programmes such as the Project Preparation Funds, we help to create an enabling environment for infrastructure projects. We assist in the processes of infrastructure implementation such as the upgrading of substations and electrification of households, roads, construction of wastewater treatment works, reticulation and provision of bulk water. 

DBSA infrastructure planning support

We also serve as project planning support to under-resourced municipalities. We do this through our carefully designed non-lending development subsidy. The purpose of this is to facilitate projects that help under-resourced municipalities with a “Master Plan” in water, sanitation, electricity, roads and stormwater, and infrastructure investment plans.

The majority of under-resourced municipalities are characterised by the lack or inadequate infrastructure plans, which affect sustainability provided by municipalities to communities in many ways. Prioritising infrastructure projects that build up municipalities accelerates the productivity of the beneficiary municipalities. 

Put simply; beneficiary municipalities get the ability to provide the required services to their respective communities. This increases access to opportunities for the people in these communities. That’s how we, as one of the development finance institutions in South Africa, play a role in rural development.

Final thoughts

An inclusive economy cannot be achieved without building a strong rural economy, and that starts with infrastructure innovation. With feasible and sustainable infrastructure development, populations from rural areas stand a chance at accessing quality basic services such as nutrition, healthcare, education, employment and entrepreneurial support.