The World Bank has approved a $1.5 billion loan to South Africa aimed at overhauling critical infrastructure and accelerating the country’s shift to a low-carbon, sustainable economy, according to the National Treasury. The funding, announced on Monday, comes at a time when aging transport systems, port congestion, and persistent power outages have severely impacted key industries and slowed economic growth in Africa’s most industrialised nation.

“This agreement reinforces the strong and constructive collaboration between the World Bank and the government of South Africa,” the National Treasury said. “This partnership marks a significant step toward addressing South Africa’s pressing economic challenges of low growth and high unemployment.”

The loan is expected to relieve infrastructure bottlenecks, particularly in the freight and energy sectors, paving the way for inclusive economic growth and job creation. South African President Cyril Ramaphosa and his coalition government have committed to tackling corruption and the mismanagement that has plagued state institutions for decades. The government sees infrastructure reform as a pathway to not only economic recovery but also long-term sustainability.

While the Treasury did not provide detailed project breakdowns, it noted that the loan terms include a three-year grace period, which is more favorable than typical commercial financing and will help ease pressure from rising debt-service costs.

In line with its strategic focus, South Africa’s 2025–2026 national budget allocates over R1 trillion across the next three years toward critical infrastructure investment in transport, energy, water, and sanitation with the broader goal of expanding access to basic services and stimulating employment.

However, the country’s economic outlook remains cautious. The Finance Ministry recently revised its GDP growth forecast for 2025 down to 1.4% from a previous estimate of 1.9%, citing global headwinds, persistent logistics constraints, and rising borrowing costs. Finance Minister Enoch Godongwana stated that government debt is projected to stabilise at 77.4% of GDP by the 2025/26 fiscal year.

The World Bank’s support comes amid broader funding challenges, including a significant shortfall in HIV-related aid. Earlier this year, the dismantling of USAID by the Trump administration led to a loss of approximately $436 million in annual support for HIV treatment and prevention in South Africa, threatening healthcare programs and thousands of associated jobs.

Godongwana acknowledged that the government lacks the funds to fully bridge the gap created by the aid cut, which has put pressure on South Africa’s already strained healthcare system particularly in its efforts to support one of the world’s largest populations of people living with HIV.

The World Bank’s loan is expected to serve as a catalyst for economic reform, with hopes that improved infrastructure, especially in energy and logistics, will restore investor confidence and drive sustainable, long-term growth.

Ghana’s Parliament has approved a $2.8 billion debt relief deal with 25 creditor nations, including economic heavyweights such as China, France, the United States, Germany, and the United Kingdom, marking a crucial step in the country’s ongoing efforts to recover from its most severe economic crisis in decades.

The approval, granted late Tuesday, is expected to unlock further disbursements under a $3 billion International Monetary Fund (IMF) bailout programme, which Ghana secured in May 2023. That bailout has since helped stabilise the nation’s economy, which had been reeling from inflation, currency depreciation, and debt distress. The IMF-backed deal also prompted a positive credit rating revision from Fitch.

“The terms of the debt treatment offer a debt service relief of $2.8 billion during the Fund-supported programme period (2023–2026),” a parliamentary report seen by Reuters confirmed. The debt restructuring applies to payments due between December 20, 2022, and December 31, 2026, which will now be capitalised and repaid between 2039 and 2043—giving Ghana over 15 years of breathing space on repayments.

Under the terms agreed with the Official Creditor Committee, interest rates on the restructured debt will range from 1% to 3%, depending on original contract terms. This arrangement provides the Ghanaian treasury with substantial savings, as the rates fall well below current market levels.

“The Committee noted that the debt restructuring was critical in supporting government to restore and sustain macroeconomic stability and debt sustainability,” the report concluded, with lawmakers unanimously recommending approval of the deal.

Ghana, the world’s second-largest cocoa producer, defaulted on most of its external debt in December 2022. Since then, it has been actively engaged in negotiations to restore economic order and win back investor confidence. The memorandum of understanding with bilateral creditors, signed in January 2024, reflects broad international support for Ghana’s reform agenda.

While the parliamentary approval is a key milestone, Ghana is still negotiating with commercial creditors to complete the full debt restructuring process. The outcome of those talks will be crucial in determining the country’s long-term economic recovery trajectory.

With this debt relief, the West African nation takes a significant step toward restoring macroeconomic stability, improving debt sustainability, and creating fiscal space for growth, especially in critical sectors like agriculture, manufacturing, and infrastructure.