South Africa's loan for reform: World Bank in control

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South Africa’s loan of R26 billion for reforms authorised by the World Bank will improve the country’s infrastructure.

The Country Partnership Framework serves as the core plan to help South Africa reform through investments and partnerships.

STRATEGIC PARTNERSHIP REFORMS

Reform aims to reorganise Eskom, transition to cleaner energy sources, make state-owned enterprises work better, and influence policies.

The National Treasury supports these as part of the process of getting the debt and the budget back on track.

Giving private control over public value is meant to get private money to pay for public services and infrastructure.

DOES SOUTH AFRICA GAIN MORE OUT OF THE CPF AGREEMENT?

South Africa gets short-term help with energy reforms, freight transport, and job creation.

The World Bank benefits by getting interest, policy power, and access to markets through its private subsidiary, the International Finance Corporation (IFC).

International corporations invest alongside private companies to get into state-run industries like energy and logistics.

WORLD BANK BEHIND ECONOMIC INDEPENDENCE

People are worried that South Africa’s economy won’t be stable in the long run if it relies too much on foreign loans.

Redge Nkosi, an economist, told SABC News what would happen if South Africa’s reform fails: it would get weaker, and foreign investors would have an easier time taking advantage of locals.

The World Bank division director for South Africa, Satu Kahkonen, and the Minister of Finance, Enoch Godongwana, believe the loan will help the country’s growth through reforms.

WORLD BANK’S SIMILAR LOANS EFFECT

Countries like Nigeria and Burkina Faso are cutting debt and reducing foreign loan dependency. However, Africa’s total debt load keeps escalating to over a trillion.

Leaders at the African Union (AU) at the debt conference in Lomé, Togo, from 12 to 14 May 2025, urged the International Monetary Fund (IMF) to swiftly alter Special Drawing Rights (SDRs) to improve the utility and equity of debt relief.