Deputy Minister of Finance David Masondo (left) and US Deputy Secretary of the Treasury Wally Adeyemo at Treasury. Adeyemo is on a working visit to South Africa from March 10 to 15. Picture: Jacques Naude Independent Newspapers
Fixing South Africa’s energy crisis was more a matter of political will than capacity, US Deputy Secretary of the Treasury Wally Adeyemo said yesterday while meeting with his South African counterpart, Deputy Minister of Finance David Masondo, as part of a working visit to the country.
He reiterated the US’s commitment to helping with challenges posed by load shedding, job creation, corruption and managing the Just Energy Transition (JET).
“No country’s economy can succeed without keeping the lights on. South Africans should not have to rely on an app to determine they can prepare a metal for their families. Businesses should not have to spend thousands of dollars on generators. South Africa has the resources to generate reliable power for its citizens,” he said.
“What I have heard from South Africans is that keeping the lights on is not a question of capacity, it is the question of political will to make decisions necessary to modernise the grid and enable new generation sources to come on line,” he said.
Adeyemo announced that US President Joe Biden had urged the Congress to renew the African Growth and Opportunity Act (Agoa), through which about $3 billion (R56bn) of South African exports were facilitated last year.
This was reassuring as South African business were worried that the Agoa deal could be in jeopardy since tensions had arisen between the two states.
This included the docking and refuelling of Russian sea vessels and aircraft as well as South Africa’s apparent willingness to deal with Russia in the face of its aggression against Ukraine, among other issues.
Adeyemo said South Africa’s key priority areas to unlock its economic potential lay in reliable power, keeping its connection to the global economy, especially the clean energy supply chain, as well as stemming the tide of corruption.
Along with other JET partners, the US stood ready to provide financial resources and technical assistance to jump-start the energy transition and solve South Africa’s energy crisis.
Adeyemo said the US was impressed that two years into the JET partnership, South Africa had made important progress in implementing policies that opened power generation to private sector investment, which had resulted in the expectation of 66GW of renewable energy projects, which were enough to meet air pollution and climate change goals.
He pointed to the role development banks were playing, highlighting the US’s support for the $2bn funding of South Africa by the World Bank and the African Development Bank.
He said the US was interested in making sure the JET was a just one and was ready to commit more than $9bn in financial assistance.
The US in 2022 committed $45 million to the retraining of workers in Mpumalanga as coal power stations were decommissioned.
“As the world demands more minerals to drive the transition, it can generate more opportunities to ensure gains are shared equally,” he said.
Michael Walsh, a commentator on SA-US affairs, said Adeyemo’s call to tighten a grip on corruption came as no surprise as the US had in its 2022 country-level strategic plan declared the reduction of corruption by South Africa to be a strategic priority.
“Long before the breakdown in US-South Africa relations following the Lady R incident, countering corruption in South Africa was made a national security and foreign policy priority within the US government,” he said.
Walsh noted that the White House might not want to tip over the boat in US-South Africa elections prior to the upcoming national elections in both countries. But the Biden Administration could not ignore the current temperature on US-South Africa relations within the US Congress.
It was reaching a boiling point amid an election year, he said.
“After the breakdown in US-South Africa relations last year, members of Congress on both sides of the aisle have been calling on the White House to take a much more confrontational approach with the government of South Africa. Some even want South Africa to be treated in the same vein as a strategic competitor,” Walsh said.
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