South Africa is launching a massive $3 billion initiative, backed by the World Bank and government funds, to breathe new life into its eight largest cities, including Cape Town, Johannesburg, and Durban.
The programme, a desperate response to failing infrastructure and public service delivery, will use a $1 billion World Bank loan alongside $2 billion in government funds to target water, sanitation, electricity, and waste management.
With millions of residents in urban areas suffering from power outages, water shortages, and unreliable services, the government’s Metro Services Trading Program seeks to reverse this decline. Over 22 million South Africans live in the cities set to benefit from this programme, which spans nearly 30 000 square kilometres, an area 20 times larger than London, as reported by the Daily Investor.
The plan isn’t just about throwing money at the problem; it’s structured around performance-based grants. Municipalities will be financially incentivised to meet key service delivery targets, focusing on cutting water and electricity losses and improving revenue collection.
BusinessTech reports that this incentive-based system aims to drive urgency in fixing the widespread failures that have plagued the cities for years.
The announcement comes after the ruling ANC party suffered major losses in elections, partly due to voter anger over the deteriorating state of municipal services. The pressure is mounting for the government to deliver results – especially in areas like Cape Town and Durban, where citizens have had enough of frequent outages and poor service.
In addition to the $3 billion from the World Bank and government, the plan will also tap into $6 billion raised by the cities through local revenue and borrowing, creating a $9 billion effort to revamp South Africa’s metropolitan infrastructure. This could be the make-or-break moment for a country where the city services crisis has reached a tipping point.
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