Rural property development in South Africa faces a myriad of challenges.

Inadequate infrastructure and limited financing significantly deter investment. As the nation grapples with these issues, the impact of climate change further complicates the landscape, affecting agricultural output and land productivity.

Climate change

In a recent response to an Independent Media Property's Given Majola, Boitumelo Mosako, CEO of the Development Bank of Southern Africa (DBSA), highlighted the pressing nature of these challenges.

“South Africa’s rural property development has made incremental progress over the past five years, driven by increased investment in infrastructure and agricultural productivity.

"While access to essential services such as water, energy, and transport has improved — thanks in part to initiatives like DBSA’s water and sanitation projects in regions like Vhembe, Limpopo — challenges related to climate change and limited financing continue to hinder large-scale transformation,” Mosako explained.

Housing sector under pressure

Earlier this year, the national Department of Human Settlements (DHS) reported that the local housing sector is facing significant pressures. Persistent rainfall in various provinces and devastating fires, particularly in the Western Cape, have increased the demand for emergency responses in human settlements.

Recovery efforts and sustainable development

Mosako noted that the economic strain from the COVID-19 pandemic and global market fluctuations has slowed progress in rural development over the past three years.

“However, recovery efforts have led to renewed interest in sustainable rural development, with a shift towards innovative financing models and public-private partnerships.

"In the last year, projects focused on climate resilience and value chain development have gained momentum. Institutions like the DBSA have played a key role in financing rural infrastructure, particularly in water and sanitation, renewable energy, and transport,” she said.

Integrating renewable energy

The DBSA, a development finance institution wholly owned by the Government of South Africa, has made strides in integrating renewable energy into the rural economy. Its involvement in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has improved access to electricity for farming communities.

Mosako emphasised that these efforts, combined with the International Fund for Agricultural Development’s (IFAD) global expertise in rural poverty alleviation, provide a strong foundation for further development.

Unlocking opportunities for growth

“Significant opportunities exist for the rural property sector through advances in technology, sustainable farming practices, and targeted infrastructure investments,” Mosako stated.

“Unlocking these opportunities requires a multi-faceted approach.

"Expanding access to finance through blended funding models, similar to those used by DBSA in municipal energy and transport projects, will accelerate rural development. IFAD’s five decades of experience in financing smallholder farmers and supporting rural enterprises offer a valuable blueprint for South Africa.

"By leveraging these combined strengths, South Africa can create a more resilient and economically viable rural sector.”

The importance of infrastructure investment

With over 60% of Africa’s population living in rural areas, these communities face significant barriers to economic growth and resilience.

Last week, the DBSA and IFAD signed a groundbreaking Memorandum of Understanding (MoU) to co-finance and accelerate sustainable infrastructure and economic growth in underserved communities. This partnership was unveiled at the Finance in Common Summit 2025 in Cape Town.

Collaboration for sustainable development

Mosako highlighted that the collaboration between DBSA and IFAD presents a significant opportunity to accelerate rural property development by merging financial expertise with agricultural innovation.

“DBSA’s infrastructure financing capabilities will be complemented by IFAD’s extensive experience in supporting small-scale farmers and rural entrepreneurs. This collaboration will facilitate investment in critical infrastructure such as roads, irrigation systems, and renewable energy access, creating an enabling environment for economic activity,” she said.

The need for sustained investment

For rural property development to reach its full potential, sustained investment, policy stability, and strategic collaboration between government, development financiers, and businesses are essential.

“DBSA’s track record in financing rural electrification and transport infrastructure has demonstrated how targeted investments can unlock economic potential.

"Similarly, IFAD’s success in improving food security and nutrition in rural areas underscores the importance of holistic development strategies. By scaling such initiatives, this partnership has the potential to transform rural economies and improve livelihoods across South Africa,” Mosako added.

Addressing land reform challenges

Last month, Peter Setou, CEO of the Vumelana Advisory Fund — a non-profit organisation established to assist communities in the land reform programme — pointed out that both the High-Level Panel Report, often referred to as the Motlanthe Report, and the Presidential Advisory Panel on Land Reform and Agriculture have identified critical issues hindering the success of land reform.

These include inadequate government capacity, poor coordination, corruption, and elite bias. The absence of a robust legislative framework to guide and hold policymakers accountable has also been highlighted as a significant issue.

“Additional concerns include uncertainty about the objectives of land reform, inadequate budgets, limited access to financing for beneficiaries, and the persistent lack of comprehensive post-settlement support. These issues collectively require urgent and focused interventions to achieve meaningful progress,” Setou stated.

Implementing solutions for rural poverty

Setou emphasised that these challenges cannot be addressed solely through legislation. The most challenging work lies in implementing solutions that balance social and economic development while addressing social justice issues.

“We must acknowledge that land and agrarian reform alone will not alleviate rural poverty.

"A revitalised and well-targeted land reform programme, combined with investments in new infrastructure, such as irrigation systems, can significantly contribute to job creation.

"It is also essential to recognise that the government cannot address all these challenges alone.

"An enabling environment for private-sector involvement must be established, along with active support for partnerships.

"Closer collaboration with entities promoting these partnerships is crucial for success. Given the high demand for public resources and limited funding, innovative approaches to financing land reform are urgently required. Removing barriers to affordable finance for land reform beneficiaries is equally important. In this regard, closer collaboration with the financial sector is crucial,” Setou concluded.

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Unlocking rural property: how land reform, tech, finance, energy can drive growth