South Africa Secures R25 Billion World Bank Loan to Create 600,000 Jobs

• South Africa secured a massive $1.5 billion loan from the World Bank to modernise its infrastructure
• The World Bank said reforms in electricity and transport could create almost 600,000 new jobs by 2032
• Finance Minister Enoch Godongwana said the loan would tackle long-standing growth and infrastructure constraints

South Africa has locked in a $1.5 billion (R25 billion) loan from the World Bank to fund infrastructure upgrades and drive job creation across the continent's largest economy. The loan is the fourth in a series of development policy financing packages extended to South Africa since 2022. It targets persistent infrastructure bottlenecks that have weighed down economic growth for more than a decade.

The World Bank said the reforms backed by the funding, particularly in electricity and transport, could generate close to 600,000 jobs by 2032, with around 280,000 of those expected to materialise as early as next year. The lender pointed to tangible progress already made under the country's reform agenda. The World Bank said in a statement:

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"Load shedding has been virtually eliminated for a year and a half, private investment in renewable energy has increased sixfold, and rail and port freight volumes have risen by more than 50% since 2023."

Godongwana welcomes the Loan

Years of near-daily scheduled power cuts, known locally as load shedding, have become significantly less frequent following a turnaround programme launched by President Cyril Ramaphosa at state power utility Eskom. According to Daily Investor, a reform tracker maintained by Business Leadership South Africa found that almost 70% of priority projects are either on schedule or already completed.

Finance Minister Enoch Godongwana welcomed the development, saying the government was committed to clearing the structural barriers that had stunted growth for too long. He said:

"Working with the World Bank Group, we are deepening reforms already delivering results in energy and transport, while for the first time tackling the governance and investment gaps in our water sector that affect millions of households, particularly the poorest.”

3 Other Briefly News stories about loans

• NDB approves $1 billion loan for South Africa to address failing municipal infrastructure.
• SA content creator Johan du Plessis shared a Facebook video breaking down what a R2 million home loan really costs.
• South Africa has secured a concessional climate loan from Germany to the value of R3.8 billion, to boost the country's power grid.

Source: Briefly News