Editorial

The South African road dilemma: Are we spending too much money on roads?

Stephan Krygsman

Copyright: © 2025. The Author Licensee: AOSIS.
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/).

Introduction

South Africa has the largest road network in Africa and the 12th largest road network in the world – truly an impressive feat for a developing country characterised by large income inequality, low economic growth and one of the highest unemployment rates in the world. More than 800 000 km of roads crisscross the country, potentially providing access to opportunities for households, markets for companies, access to employment and a large labour pool for companies. The importance of the road network in the economic development of South Africa, or any country, has never been doubted (European Conference of Ministers of Transport 2001; Fedderke, Perkins & Luiz 2006; Volpe Martincus, Carballo & Cusolito 2017). It is, therefore, no surprise that the apparent poor condition of the road network has been a highly discussed topic, evoking strong opinions from stakeholders, Non-Government Organisations (NGOs) and companies. All parties lament the obvious deterioration of the road network. Poor driving conditions, the proliferation of potholes and problems with road maintenance have made their way into the popular press (see Figure 1), with frequent articles highlighting government failure.

FIGURE 1: Popular press articles about South African roads: (a) 25 million potholes on South African roads, (b) Revealed: How to survive South Africa’s bad roads, (c) Roads are littered with potholes and overgrown grass in this Soweto community.

More concerning, however, are the recent court rulings that implicate the role of local and provincial government authorities in accidents and road safety, which can be attributed to poor road conditions. Figure 2 shows two recent court cases where the Member of the Executive Council (MEC) has been found liable for damages and injury to road users as a result of poor road maintenance.

FIGURE 2: Court judgements against the government.

Public discontent with the state of our road network and court judgements have demanded action from public authorities, notably the National Department of Transport. Supported by strong road lobby groups, including road engineering firms and South African National Roads Agency SOC Ltd (SANRAL), the emphasis is often placed on an increase in funding for roads by various means, including a demand for an increasing allocation to roads from the national purse, tolls, international bank loans, among others. This is normally supported by calls to ringfence the fuel levy for roads and implement the user-pay principle for road use, among others. The recent Draft Road Infrastructure Funding Policy of South Africa (September 2024), for the most part, continues this path and argues that our roads will continue to deteriorate if the funding dilemma is not solved.

The premise of this editorial, however, is that road funding and the focus on increasing the allocation to roads are misplaced. So too is the idea of a ring-fenced road fund and applying the user-pay principle for road-use charges. These popular statements are erroneous in a country with significant unemployment, large sprawling cities, and a dysfunctional public transport and freight rail network.

While this premise may seem counterintuitive, given a well-established link between roads and economic growth, it is argued that additional investment in road infrastructure, in the absence of a coherent overall transport strategy, will do more harm than good in South Africa.¹ The following sections provide brief arguments and context in support of this premise.

The South African road network in perspective

According to eNaTIS, approximately 12.3 million vehicles used the country’s extensive road network in 2025 (eNaTIS 2025). This is roughly 198 vehicles per 1000 people of our population (Figure 3a). The annual growth in South Africa’s vehicle population is 2%–3%, using available vehicle population data. The vehicle fleet travelled ± 190 billion kilometres in 2025, based on trends from earlier data (RTMC 2014). An estimated 30% of the kilometres are travelled on the national road network maintained by SANRAL (SANRAL 2015).

FIGURE 3: (a) Total kilometres of paved and unpaved roads and (b) vehicles per 1000 of the population.

South Africa boasts the 12th-longest road network in the world (Figure 3a) but only ranks 83rd in terms of vehicles per capita (Figure 3b). Our vast road network is used by a small vehicle population. The country has a mismatch between network size and number of vehicles, which will impact our road pricing approach and the so-called user-pay principle. On average, road supply, represented by the network length, far exceeds the road demand, represented by vehicles. The bigger the road network, the larger the vehicle population should be. If this is not the case, road users will either be paying proportionally more or proportionally less if there are fewer or more road users, respectively, for the road network. Applying the average cost (AC) or fully distributed cost pricing (FDCP) methods will, in the South African setting, lead to road users paying a lot more than the economically efficient prices, which is the marginal social cost (MSC). Charging the road users an MSC (pavement damage, congestion, environmental and accident costs) will, on the other hand, lead to financial deficits, as the extensive network is, for the most part, sparsely used. A financial deficit under an MSC pricing regime, however, is not a failure of road funding policy. It simply reflects the excess road capacity, indicating that the supply, on average, for the country exceeds demand. The user-pay principle will, in the case of South Africa, not be feasible to recover the costs from road users.

South Africa is the 25th largest country in the world, and the road network outperforms other indicators such as Gross Domestic Product (GDP) at Purchasing Power Parity (PPP) and GDP per capita, 31st and 97th in the world, respectively; the Human Development Index, 119th in the world; quality of math and science (139th); and the country’s dismal Gini-Coefficient score (2nd worst in the world). South Africa’s road network is also fairly well aligned with the best international standards.

The Global Attractiveness Index, which measures countries’ appeal for investments, shows South Africa ranking overall between 47th and 55th out of 144 nations. However, its road quality stands out at 37th place, in sharp contrast to its electricity supply, which ranks 99th. Likewise, South Africa secures the 20th position on the Global Logistics Performance Index and leads among BRICS countries (Joynt 2024; The World Bank 2016). This strong logistics performance stems primarily from the nation’s high-quality infrastructure, reliable delivery timelines and robust road network.

South Africa is unlikely to significantly boost its standings on these indices through major expansions of its existing road system. Given its already solid ratings and the law of diminishing returns, further investments in roads would yield only marginal gains while requiring substantial capital. Conversely, failing to maintain road infrastructure at adequate levels could rapidly erode the country’s advantageous position.

How much does South Africa allocate to roads?

It is not an easy task to determine how much money South Africa spends on roads. South Africa does not have a ringfenced road fund, and funding for roads is allocated as part of the general budgeting process. All money collected via the fuel levy and all other road and vehicle-related and road-use taxes, such as VAT on new vehicles, import duties, customs and excise levies, CO2e emission levies, among others, accrue to the National Revenue Fund (Van Rensburg & Krygsman 2019). Except for the Road Accident Fund Levy, no road-generated revenue is earmarked for roads.

The country allocates funds to local authorities by way of the Local Government Equitable Share (LGES), Conditional Grants including the Municipal Infrastructure Grant (MIG), the Provincial Road Maintenance Grant (PRMG) and the General Fuel Levy Sharing only with Metros. There are no restrictions placed on the use of the Equitable Share as opposed to the Conditional Grants. Local governments can use the equitable share to address their local development needs, as manifested in the Integrated Development Plans (IDPs). This somewhat intricate and multi-tiered allocation makes it difficult to determine how much funding South Africa allocates to roads. Some estimates have been made, and we can assume that South Africa spends roughly 1.3%–1.4%, if measured as a share of GDP, on roads (Van Rensburg & Krygsman 2020).

Figure 4a and b provide some measure of South Africa’s road expenditure compared to other selected countries. Figure 4a shows the network length in kilometres (vertical axis) as a function of the road expenditure to GDP ratio. Figure 4b shows the vehicles per 1000 population as a share of road expenditure to GDP. The black dot represents the average. South Africa is an outlier, together with Australia, on both these graphs. While there is really no right or wrong and not all countries are included in these figures, it is probably good to understand why South Africa deviates. The impression is that South Africa already spends a considerable amount on roads.

FIGURE 4: (a) Road network versus road expenditure per GDP ratio and (b) vehicles per 1000 versus road expenditure per GDP ratio.

Figure 5 shows road expenditure for selected countries over the period 2004–2015. Data for South Africa and other countries were only available for the period 2011–2015. Two trends can be observed: Firstly, all countries see a slight decline in their road expenditure. This is most likely because of a mature road network requiring mainly maintenance and minimal upgrading. Secondly, South Africa spends considerably more on roads, measured as a share of its GDP, than the selected countries.

FIGURE 5: Road expenditure and Gross Domestic Product (GDP).

Does road investment really lead to economic development?

Roads do have a causal relationship with economic development. It is hardly possible to think of economic progress without the ability to overcome distance, access markets, source inputs, attract labour, among others. It was also Adam Smith (1776) who noted:

Good roads, canals and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. (p. 147)

But it is also reasonable to assume that this relationship is neither linear nor constant. The additional benefit of more roads likely decreases with an extensive road network. South Africa probably already has an adequate road network, and we are probably already spending too much for any additional benefit from this expenditure.

Figure 6 shows various scatterplots of GDP per capita (PPP). Figure 6a shows roads per 1 000 000 persons, 6b Logistics Performance Index (LPI), 6c World Governance Index, 6d UN Education Index, 6e labour productivity and 6f roads per 1 000 000 persons, respectively. While by no means a scientific and statistically robust methodology to illustrate the relationship between economic development and roads, the graphs do indicate: (1) the relatively weak relationship between roads and GDP (PPP) per capita; and (2) the stronger relationship between GDP (PPP) per capita and the Logistics Performance Index, the World Governance Index, the Education Index and labour productivity. A cursory observation is that South Africa falls below the fitted regression lines in all cases: a possible case of not performing to its potential? The last figure fits a polynomial curve to the data, reflecting an inverted U-type relationship between roads and economic development. Roads may support economic development, but only up to a point, after which additional roads may not have the same outcome.

FIGURE 6: GPD per capita: (a) Roads per 1 000 000 persons (b) LPI, (c) WGI, (d) UN Education index, (e) labour productivity and (f) Roads per 1 000 000 persons.

Despite the extensive road network and significant government spending on road infrastructure, South Africans still spend a considerable amount of money on transport. Figure 7 shows the percentage of household expenditure on transport for various countries, compared to GDP per capita. While only 50 countries are shown, South Africa is clearly an outlier (Knipe & Krygsman 2024).

FIGURE 7: Expenditure on transport as a share of GDP per capita.

Several supportive factors should be in place for roads and transport to support economic growth. These include (Banister & Berechman 2001):

• Positive economic externalities, such as advanced skills, technology and entrepreneurship, which enable stakeholders to leverage improved access for greater competitiveness, economies of scale, density and diversity benefits, and overall productivity gains.
• Investment factors, particularly the availability of capital and the associated costs, are critical for funding and sustaining infrastructure projects.
• A conducive political framework and institutional structure that promotes economic growth and development, including transparent policies, ethical conduct and accountable governance.

Whether all these factors are present in South Africa is debatable.

What is the possible outcome of spending too much on roads?

While spending on transport may stimulate economic development, either through direct effects such as lower transport costs or wider economic benefits like agglomeration economies of cities, excessive spending on roads, as one element of the transport system, may lead to some unsustainable long-term outcomes which can be very difficult to correct and impact our economic development potential.

City size and urban public transport

Cities exist because transport is expensive. As better roads are constructed and the cost of transport decreases, the agglomeration benefit of dense cities is spread over a larger area, allowing households to locate further from the city centre and employment opportunities. The outcome is urban sprawl, which has significant negative impacts on public transport viability and accessibility, urban infrastructure costs, and congestion. As urban roads improve, the demand for road-based transport increases. Better roads, vis-à-vis the rail network, will lead to more road-based public passenger transport, such as minibus taxis and buses and private cars. Rail transport, however, has significant social benefits over bus transport, including fewer accidents, less pollution and less infrastructure cost per passenger-kilometre (Avenali et al. 2020). Lower rail patronage decreases the financial viability of rail, leading to a reduction in service. This becomes a vicious circle of poor service responding to a lower demand, and so on. The ‘economic benefits’ of transferred traffic from rail to road-based public transport are indeed handled as a negative ‘benefit’ in economic evaluation.

As road-based public transport increases, and private vehicles are used to travel from the sprawling suburbs to places of employment, congestion increases. Road-based public transportation is especially vulnerable to congestion, resulting in even longer travel times. Congestion has particularly negative implications for lower-income communities, who are often reliant on public transport. Their ability to access meaningful formal employment decreases with an increase in congestion. Lower-income households have a constrained budget which they need to share between education, housing, social services, food, clothing, among others. They typically spend a significant amount of their household income on transport (Knipe & Krygsman 2024). South Africa has seen an increase in the share of expenditure allocated to transport, and this is partly the result of poor public transport and sprawling cities. Transport expenditure is hardly a productive expense, as opposed to spending on housing, education, or even services.

Rail and road freight and logistics

Rail is the most effective and efficient freight transport mode, measured in energy, environmental and financial indicators. For a significant share of container freight transport and some raw materials like manganese, road and rail are substitutes. Trucks are responsible for 90% of road deterioration (Low, Haszeldine & Harrison 2023). Pavement damage caused by vehicles is proportional to the fourth power of their weight, so a 9-tonne truck does over 3000 times the road damage of a 1-tonne car. The increase in truck traffic over the years has been mainly to blame for the rapid deterioration of the South African road network, specifically the rural road network. The extensive expansion of the national road network and the deterioration of the rail network and service reliability have resulted in a dramatic shift from rail to road freight.

Rail is built on economies of scale, and it is only when the rail system is well utilised that the economic benefits of rail transport materialise. The above mode distribution has led not only to accelerated road deterioration but also to an expensive and inefficient freight logistics system.

Closely related to the increase in road freight transport by trucks is development in the logistics and supply chain sector. Supply chains take a long time to establish and deliver efficient services. It involves intermodal transfer facilities, line haul transport, standard units (containers) that can be handled across the entire chain, and significant capital investment at every stage to produce an integrated transport system with vehicles (road trucks) to handle the standardised units. This also involves investing in high-speed cargo handling and transfer facilities between the various parts of the transport system. Once the logistics sector moves from rail to road, as in the case of South Africa, it becomes difficult to return to rail. South Africa suffers from an unsustainable rail–road freight imbalance. Improving roads is not a substitute for poor rail connections.

If not road funding, where should the focus be?

Increasing the allocation to roads, via general taxes and a charge on fuel use, without at least an equal focus on the other transport elements, will not stimulate long-term sustainable economic development, lower transport costs, or improve South Africa’s international logistics performance. Rather, to achieve these objectives, the focus should be on an overall, integrated transport system with the emphasis on governance, planning and design, and financing.

Governance and management:

• Roads are South Africa’s largest network infrastructure, yet very little is known about the extent, the condition, the ownership, the use and ultimately the worth of the roads. The first step is simply to have an up-to-date and complete register of this infrastructure asset.
• Qualified staff and experts should be involved in the management of the road network. This does not necessarily imply that only engineers should be involved; asset managers, economists, planners and public policy experts, in addition to engineers, should be involved.
• It is unrealistic to consider that every town authority, district, municipality, province, or state-owned entity has all the experts available to manage the road network, nor is it desirable. Road networks exhibit spatial spillover and network effects, as well as environmental, land-use and social effects that are not localised, and economies of scale in network construction. These properties call for a regional or district development model to manage the road network.

Design and planning:

• South Africa has some of the highest posted travel speeds in the world (Steunenberg & Sinclair 2014). It is astounding that a developing country with large informal areas abutting highways, large numbers of non-motorised transport users and one of the highest accident rates in the world continues to design and build highways with speed limits that are higher than the Western world norm. By lowering the design speed to comparable EU standards, South Africa should be able to reduce accidents and lower the costs of construction significantly.
• All transport, but specifically road projects, should be subjected to a thorough economic evaluation. Projects undertaken in response to a sound economic evaluation have a much greater possibility of supporting economic development than hindering it (Fedderke, Perkins & Luiz 2006). This economic evaluation should not be undertaken by the road consultants but by independent evaluators or, ideally, the responsible local government.
• South Africa should consider roads as one element, albeit an important element, in the country’s transport system. Urban areas can be designed to minimise the demand for motorised transport by focusing on design, density and diversity of opportunities. Rail can be planned as the preferred mode for freight, supported by origin and destination intermodal transfer facilities. Public transport should be the main mode of transport in cities, which alleviates congestion and allows for the agglomeration benefits of cities.

Funding:

• South Africa should fund transport and not focus on roads. The funding policy must be based on equitable transport modal charges and aim to achieve a balance between the transport modes.
• The country should consider a move away from a tax-based approach, such as the fuel levy, to a more pricing-based approach that considers vehicle use and road-use charges. A pricing-based approach can include heavy vehicle-based charges on all vehicles over 3500 kg, congestion charges for metropolitan areas, and distance-based charges for normal and electric vehicles.
• The Road Accident Fund (RAF) should be discontinued in favour of 3rd party and private vehicle insurance. A small RAF charge, for example, 20 cents per litre, can be retained to spend on road safety measures and campaigns.²

South Africa has an extensive, well-maintained road network. Contrary to prevailing belief, an increase in road funding will not avert the deterioration of the road network. It will simply be a case of new wine in old bottles. Attention should be paid to governance and management and planning and design, after which the road funding policy can be addressed.

An increase in funding is not a proxy for poor governance and ineffective planning and policy. South Africans deserve a well-maintained road network and an efficient and equitable road funding policy. But good roads are not a substitute for poor schools, bad hospitals, or other social dilemmas. A naïve road funding policy, as a piecemeal intervention, will do us no favour over the long run.

References

Footnotes

1. This premise should be qualified: (1) This theory only relates to South Africa, and in the context of the current level of road investment and length of the road network, and (2) fundamental to the premise is the current state of urban and transport governance, capability and management.

2. South Africa is, for all practical purposes, the only country in the world with a road accident fund and an accident levy imposed on fuel. In some strange twist of fate, we are subsidising accidents.