Finance Minister Enoch Godongwana has expressed his gratitude for the commitment by the US to South Africa’s energy transition, noting that it comes at a critical stage when the country is facing grinding energy shortages.

Godongwana on January 26 met with US Secretary of Treasury Janet Yellen to discuss a number of matters, including the state of the global economy, policies to promote regional growth and investment and the further development of trade and investment ties between the US and South Africa.

The US ranks among South Africa’s top trading partners, with a diverse flow of goods, services and know-how between the two States serving as a critical launchpad for the development of both economies.

The US is also part of the International Partners Group of developed economies that in 2021 pledged $8.5-billion, including about $1-billion from US government agencies, to support South Africa’s move to a low-carbon economy and plans to reduce emissions.

“This partnership represents South Africa’s bold first step toward expanding electricity access and reliability and creating a low carbon and climate resilient economy, a move that I believe will alleviate the deep fiscal strain the energy sector is putting on South Africa’s economy and support strong economic growth,” Yellen highlighted.

She said the partnership would also invest in the jobs of growing industries so that the transition was just and did not leave anyone behind.

Godongwana reiterated his view that developed nations could do more in this regard, especially by ensuring that the financial support includes a much larger grant-funding component.

Africa’s “special needs and circumstances”, he said, needed to be recognised globally, especially owing to the reality of a high number of resource-dependent economies on the continent, in addition to high levels of poverty, unemployment and underdevelopment.

"This recognition would be an important step towards unlocking the financial flows to the continent, allowing it to play its role in the global transition to a low-carbon future," he said.

Godongwana also urged Yellen to support South Africa’s push for the expedited reform of international financing institutions and multilateral development banks to include wider participation of developing countries and middle-income economies that historically have had limited representation on these critical platforms.

Strengthening the development outcomes of these institutions and the finance they provide would also be a critical area of cooperation, he said.

He expressed his commitment to continuing to advocate for the implementation of the common framework for debt treatment, noting that the global financial crunch triggered by the Covid-19 pandemic, and its lingering after-effects, had pushed a number of poor and emerging economies into debt distress.

This, he added, underlined the urgency of these reforms, as well as the need for greater support for speedy and equitable debt resolution mechanisms.

On the issue of bilateral cooperation in combating money laundering, illicit financial flows and cross border crimes, Godongwana appraised Yellen of South Africa’s far-reaching reforms and concrete actions taken since receiving an adverse evaluation from the Financial Action Task Force.

Meanwhile, in a media briefing prior to discussions with Yellen, the Minister said there had been constructive cooperation between South Africa and the US through the Group of 20 (G20) and the Financial Stability Board, including on making appropriate regulatory standards for the financial sector.

“I am pleased that Secretary Yellen is one of the leading US government leaders that is advancing the US administration’s initiative to bolster trade, economic and financial relations with South Africa and the African continent,” Godongwana said.

Yellen, meanwhile, said the US "strongly values" its relationship with South Africa.