World Bank’s Victoria Kwakwa on financing SA’s energy transition, addressing Africa’s debt crisis

The World Bank's Vice President for Eastern and Southern Africa, Victoria Kwakwa, recently sat down with CNBC Africa's Godfrey Mutizwa in Pretoria to discuss the bank's work in the region. Kwakwa highlighted the importance of her visit to South Africa, emphasizing the need to understand the country's programs, challenges, and engage with clients to enhance the bank's support. During her visit, Kwakwa met with key government officials, including the Minister of Finance, Minister for Public Enterprises, and the Reserve Bank Governor, among others. The discussions focused on macroeconomic challenges, growth, job creation, youth unemployment, and infrastructure development. South Africa's economy has struggled to regain momentum since the global financial crisis, with annual growth rates below 1% for the past five years. Addressing the youth unemployment rate, which stands at nearly two-thirds of the young population, is a critical priority for the country. Kwakwa emphasized the need for a just energy transition in South Africa, moving away from coal towards renewables to improve competitiveness, access to affordable energy, and address energy poverty. She highlighted the importance of supporting the decommissioning of coal plants responsibly, ensuring the well-being of workers and communities affected by the transition. The World Bank is committed to providing resources, including affordable financing and grant funding, to facilitate the transition. Kwakwa also discussed the broader debt challenges facing African countries, with a shift towards more commercial and bilateral debt contributing to increased vulnerability. Approximately 13 countries in the region are at high risk of debt distress or in distress, including Zambia, Malawi, Ethiopia, and Mozambique. The World Bank has been working on initiatives like the common framework to address debt issues and provide support to countries in need. Kwakwa acknowledged the complex economic struggles in Zimbabwe and highlighted the bank's efforts to provide technical assistance and policy advice to facilitate recovery once the country's debts are resolved. She emphasized the importance of political leadership and good governance in driving sustainable development in Africa, noting progress but acknowledging the long road ahead. Kwakwa commended South Africa's leadership in the just energy transition and expressed the World Bank's commitment to supporting the country's bold initiatives in a way that benefits all South Africans and fosters new industries and job creation.