Powering progress: South Africa, the AfDB and the infrastructure imperative

TimesLIVE

29-04-2025

The country's geopolitical stature positions it as both a contributor to and a demander of coherent multilateral reform
By
South Africa has entered a new era — politically recalibrated, economically pressured, yet fundamentally poised. The 2024 general election, resulting in the country's first national coalition Government of National Unity under President Cyril Ramaphosa, was not just a political outcome — it was a societal reset. South Africans demanded a new social contract: delivery over rhetoric, partnership over posturing, credibility over complexity. In his campaign and subsequent inaugural commitments, Ramaphosa emphasised infrastructure renewal, energy security, youth employment and national coherence as pillars of renewal. The task now is not to define direction — but to deliver at scale.
The economic headwinds remain sobering. In 2024, GDP growth hovered at 1.1%, well below the levels needed to address poverty and exclusion. Unemployment stood at 31.9%, with youth unemployment exceeding 44%. Public infrastructure continued to underperform, with deteriorating logistics capacity and ongoing energy insecurity compounding economic constraints. The 2024 Electricity Regulation Amendment Act marked a major policy shift, opening the generation and transmission sectors to competition and seeking to reduce dependence on Eskom. However, implementation bottlenecks persist, and the gap between legislative intent and lived experience remains wide.
Amid this environment, infrastructure is not just a sector — it is the backbone of recovery. The government's Economic Reconstruction and Recovery Plan rightly centres infrastructure-led growth, but delivery capacity and funding constraints have limited momentum. South Africa's capital expenditure as a percentage of GDP remains below 6%, far from the National Development Plan's 10% target. Logistics inefficiencies alone are estimated to cost the economy billions of rand annually. Transnet's operational and governance challenges have undercut freight reliability, while delays at major ports continue to undermine trade competitiveness.
I propose the creation of a Private Capital for Africa platform — housed in Johannesburg — to crowd in institutional investors, deploy blended finance tools and de-risk large-scale regional infrastructure.
Dr Sidi Ould Tah
This is why the updated National Infrastructure Plan 2050, Phase 2 (released in 2024), declared: 'A fit-for-purpose infrastructure delivery system is a precondition for inclusive economic participation, regional trade, and long-term fiscal resilience.' That framing reflects the reality: South Africa's infrastructure challenge is not only national — it is continental. As the anchor of the North—South Corridor and a key node in the Maputo Development Corridor, South Africa's success in unlocking logistics performance has direct implications for Sadc trade volumes, intra-African commerce and African Continental Free Trade Area implementation.
In this landscape, South Africa needs a multilateral development partner that not only shares its sense of urgency, but also matches its institutional sophistication. The African Development Bank (AfDB) has shown glimpses of this. In 2024, the AfDB approved a $1bn sovereign facility to support Transnet's recovery — one of the clearest signals of confidence in the state's commitment to reform. The bank has also contributed to Just Energy Transition efforts, from concessional project preparation to financing renewable energy pilots and public — private structuring. But the scale of South Africa's infrastructure imperative — and the shifting global landscape — demand a more decisive, fit-for-purpose partnership.
Global economic realities are evolving fast. Fiscal tightening, geopolitical fragmentation and climate financing imbalances are reshaping the development finance ecosystem. South Africa's own geopolitical stature — as a G20 member, Brics founder and climate diplomacy broker — positions it as both a contributor to and a demander of coherent multilateral reform.
As debates intensify around SDR Special Drawing Rights rechanneling, multilateral development banks reform and global infrastructure liquidity, I believe the AfDB must become more than Africa's lender. It must become its bridge. And that includes being a credible internal steward — governed with the transparency, institutional discipline and accountability that member states like South Africa have long championed.
This is where I believe the AfDB's upcoming leadership transition matters, not as a continental ritual but as a strategic inflection point. I offer a vision that aligns with South Africa's expectations: credible delivery, innovative capital mobilisation and institutional relevance.
As president of the Arab Bank for Economic Development in Africa (Badea), I helped reposition the institution from a quiet partner to an influential force — mobilising Africa—Gulf co-financing, targeting SMEs and supporting infrastructure corridors with agility and accountability. Under my leadership, Badea attained prestigious AA+/AAA credit ratings, quadrupled project approvals, modernised its digital systems and expanded total assets from $4bn to nearly $7bn — all while maintaining one of the lowest non-performing loan ratios (0.4%) among African development finance institutions.
My platform for the AfDB speaks directly to South Africa's core priorities. I propose the creation of a Private Capital for Africa platform — housed in Johannesburg — to crowd in institutional investors, deploy blended finance tools and de-risk large-scale regional infrastructure. This responds directly to South Africa's call for the AfDB to partner more strategically with its own development finance institutions such as the Public Investment Corporation, the Development Bank of Southern Africa and the Industrial Development Corporation — pools of capital that remain under-leveraged for African integration.
My proposal to scale AfDB's annual capital mobilisation to $50—60bn through hybrid instruments, sovereign wealth partnerships and diaspora finance aligns with South Africa's preference for innovative, non-distortionary financing that does not increase debt distress.
Beyond capital, my focus on institutional integrity — through a proposed Pan-African Results & Governance Lab embedded in the bank — reflects South Africa's long-standing emphasis on fiduciary control, transparency and performance culture. This commitment builds on my introduction of environmental, social and governance-aligned sustainable financing frameworks and ISO-certified governance systems during my tenure at Badea, credentials that mirror South Africa's own calls for accountable multilateralism. The need for institutional discipline, not just policy ambition, has never been clearer. With a reformist state, deep financial markets and advanced project planning systems, South Africa is not short on technical capacity — it needs a partner that can co-implement.
And that co-implementation must be based on trust and shared vision. In South Africa's case, the most impactful development partnerships are those that work horizontally — not just from capital provider to state, but across institutions, development banks, private capital pools and regional alliances. This is where the AfDB, under the right leadership, can amplify what South Africa already possesses: a sophisticated institutional base and a continental integration agenda that is both credible and executable.
South Africa's credibility on the world stage — particularly on matters of climate finance, regional stability and multilateral equity — is not accidental. It is the product of decades of institution-building, diplomacy and democratic resilience. The next AfDB leadership must recognise that countries like South Africa are not merely recipients of development finance — they are architects of its future. A strong, responsive and politically attuned AfDB must amplify that influence, not compete with it.
My platform is not a promise — it is a blueprint. It is not only about who leads the AfDB, but how it is led. For South Africa, the choice must be strategic, not sentimental. The development bank it helped to build must now evolve in tandem with its own transformation.
The moment demands alignment between national ambition and continental delivery. South Africa has done the political heavy lifting. It is now time for the institutions around it to match that seriousness — with resources, with reform, with partnerships and with results. The AfDB, under the right leadership, can be the partner that powers this next chapter.
Dr Sidi Ould Tah is one of the candidates running for the African Development Bank presidency. He previously held the position of minister of finance, economic affairs and development in Mauritania