The World Bank has approved a US$925 million (R15 billion) loan to South Africa to support a six-year programme aimed at improving service delivery in the country’s largest metropolitan municipalities.
The funding, issued through the International Bank for Reconstruction and Development, is part of a broader US$2.7 billion initiative that will channel resources to cities based on measurable improvements in core services such as water supply, electricity distribution, and waste management.
The Metro Services Trading Programme targets eight key metros that collectively account for 85 percent of South Africa’s economic output and house more than one-third of its population. These include Johannesburg, Cape Town, eThekwini, Tshwane, Ekurhuleni, Mangaung, Buffalo City, and Nelson Mandela Bay.
Under the model, cities will receive additional allocations when they meet specific financial and operational performance benchmarks, rather than upfront unconditional funding.
South Africa’s major cities are facing mounting infrastructure pressures — from frequent power outages and water shortages to irregular refuse collection and deteriorating distribution networks. Johannesburg alone is estimated to require more than US$12 billion to repair and modernise its infrastructure systems.
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The programme is designed to enforce accountability and institutional reform by tying disbursements to verifiable improvements such as reduced water losses, better billing collection, and faster outage response times.
The loan reflects a shift in Pretoria’s engagement with multilateral lenders. Since 2022, South Africa has taken on approximately US$3 billion in World Bank financing, reversing an earlier hesitancy to borrow at sovereign level.
Performance-linked programmes similar to this one have been implemented in countries such as Turkey, India, and China, where they have produced measurable improvements in governance and service reliability.
National Treasury will oversee the programme, and cities that show progress may unlock additional grants, creating a competitive structure rather than blanket bailouts.
Finance Minister Enoch Godongwana has repeatedly emphasized urban renewal as central to economic recovery, noting that stable and functional metros are critical to growth, employment, and investment.
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