Muthomi Ireri
The African Development Bank announced on Thursday that it has approved a $1 billion loan to South Africa’s state-owned railway and ports company, Transnet. The 25-year loan, fully guaranteed by the South African government, will finance the first phase of Transnet’s $8.1 billion investment plan to upgrade the country’s rail and port infrastructure.
Despite having Africa’s most industrialized economy, South Africa’s deteriorating railways and ports hinder foreign investment and reduce the efficiency of its export market. Transnet, along with other state-owned enterprises, has faced scrutiny for corruption and mismanagement.
In a statement, Transnet Group Chief Executive Michelle Phillips said the loan would significantly contribute to the investment plan aimed at stabilizing and improving the rail network, ultimately benefiting the wider South African economy.
Reviving the stagnant economy and reducing high unemployment rates are top priorities for President Cyril Ramaphosa. His party, the African National Congress, lost its 30-year majority in May’s elections and was compelled to form a coalition government.
Dj Vnyash
