• The government is prioritizing rail, ports, and roads in its 2026 budget to fix logistics bottlenecks.

• About $1.3 billion will fund major freight rail projects, alongside a dedicated infrastructure bond.

• Port reforms and passenger rail upgrades aim to reverse years of underperformance.

Facing mounting logistics challenges, South Africa is launching a new cycle of public investment to restore the performance of its transport infrastructure. Rail, roads, and ports account for the bulk of budget priorities, as operational constraints continue to weigh on export competitiveness and the broader national economy.

For the 2026 fiscal year, the government has placed transport at the center of its recovery strategy. Presenting the roadmap to Parliament, Finance Minister Enoch Godongwana outlined a series of large-scale investments covering rail, roads, and ports, as part of broader reforms aimed at fixing a logistics system that has been losing ground for more than a decade.

$1.3 Billion for Priority Infrastructure

Five major projects will receive 21.9 billion rand (about $1.3 billion) approved under the Budget Facility for Infrastructure. Most of the funding will target the coal and iron ore corridors operated by Transnet, with the goal of restoring annual rail capacity to 77 million tons on the coal line and 60 million tons on the iron ore line.

To support this effort, Pretoria issued a dedicated infrastructure bond in 2025, raising 11.8 billion rand to strengthen the government’s financial contribution to the program.

Passenger Rail: Targeting 250 Million Riders

In the passenger rail segment, the state-owned operator PRASA will continue rebuilding and modernizing key infrastructure. The stated goal is to increase annual ridership to between 250 million and 450 million passengers in the medium term, compared with 77 million recorded in the 2024/25 fiscal year.

The revised finance bill allocates 5.8 billion rand for rolling stock renewal, aimed at enabling the operational redeployment of the rail network.

Road Maintenance and Climate Risk Management

On the road front, the national agency SANRAL will maintain its resilience program, with annual maintenance planned for about 27,000 kilometers of roads and resurfacing of 2,000 kilometers.

An additional 1.5 billion rand will be injected into provincial grants in 2026/27 to cover disaster-related costs incurred between April 2024 and June 2025.

Reforms also extend to the port sector, with a focus on concessions and equipment modernization. In February, the Transport Ministry announced the upcoming launch of a tender for a 25-year concession of the Richards Bay dry bulk terminal, as well as public-private partnerships to develop a dedicated container freight corridor.

Restoring Logistics Competitiveness

These initiatives are part of a broader plan to reverse the decline of the national logistics system, whose underperformance has affected several strategic sectors. According to Transnet’s 2023/2024 annual report, rail and port constraints limited iron ore exports to 55 million tons in 2023. That shortfall cost South Africa its position as the world’s third-largest exporter, which it lost to Canada.

Henoc Dossa