Africa-Press – South-Africa. The World Bank approved a $925 million (R15.9 billion) loan for South Africa to support a six-year program costing three times that amount, as the country seeks to revive its major cities.
The loan, from the World’s Bank’s International Bank for Reconstruction and Development, will help South Africa’s National Treasury reward cities that meet operational and financial performance targets for urban services with additional funding. It’s the first program-for-results operation to be implemented by the lender in South Africa.
“The operation is designed to incentivize real performance improvements, accountability and institutional reforms,” Satu Kahkonen, the World’s Bank’s division director for South Africa said in a statement on Monday.
The government is setting up the so-called Metro Services Trading Program as it faces increasing pressure from citizens to improve services amid recurrent breakdowns of urban power-transmission grids, regular water outages and lax collection of refuse.
In elections last year, the African National Congress lost its outright majority for the first time since the advent of democracy in 1994 partly because of anger over poor service delivery.
The program will cover eight cities that generate 85% of South Africa’s economic output and are home to more than a third of its 63 million people. It aims to improve water and electricity supply, as well as waste collection.
It’s also intended to help cities better prepare for climate shocks and position them for partnerships with private companies in delivering services.
In Johannesburg, the country’s biggest city, outages have left swaths of the city without power for days at a time and the municipality has been beset by a series of financial scandals.
The loan marks a deepening of ties between the World Bank and South Africa, which before the pandemic had been reluctant to borrow from multilateral lenders. Since early 2022, it has secured three sovereign loans from the lender totaling about $3 billion.
The World Bank has implemented program-for-results initiatives, often on a smaller scale, in countries such as Turkey, China, and India.
In addition to Johannesburg, the program will include Cape Town and the municipalities overseeing Durban, the country’s third-largest city, and Pretoria, the capital.
Ekurhuleni — an industrial hub of more than three million people east of Johannesburg — is also part of the program, along with the municipalities that run East London, Bloemfontein, and Gqeberha.
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