U.S. Treasury Secretary, Janet Yellen discussed South Africa’s transition from its heavy reliance on coal to greener energy sources with the country’s Finance Minister on Thursday, January 26, 2023.
Yellen made brief remarks to reporters ahead of the meeting with Finance Minister, Enoch Godongwana in Pretoria but avoided mention of South Africa’s recent decision to take part in joint navy drills with Russia and China off its east coast next month.
The announcement that South Africa would host Russian and Chinese warships for 10 days of exercises in February has raised concern at the White House.
South Africa is a significant U.S. and Western partner but also holds strong ties to Russia and China, and it has adopted a neutral stance over the war in Ukraine.
Russian Foreign Minister, Sergey Lavrov, was in Pretoria for an official visit earlier this week.
Yellen’s ten-day trip to Africa, which has already involved stops in Senegal and Zambia, is one of the first steps in the Biden administration’s aim of reestablishing ties on the African continent of 1.3 billion, where China has swiftly increased its economic presence and Russia has gained a military foothold.
Yellen attended a business incubator for entrepreneurs in Senegal.
“Africa continues to lead as the youngest continent in the world. Here in Senegal, the median age is 19 years. 1.7 million Africans now enter the job market every month and by 2035, the number of Sub-Saharan Africans reaching working age will exceed that of the rest of the world combined. A rising share of working age people presents an opportunity for the continent.”
Janet Yellen
Addressing the country’s debt burden was a primary reason for Yellen’s visit to Zambia
Yellen said that South Africa’s energy sector would be one of the focuses of her talks with Godongwana.
The country is entangled in an electricity crisis, with scheduled blackouts hitting businesses and households for up to 10 hours a day because of diesel shortages and breakdowns at the state-owned electricity provider’s aging coal-fired power plants.
South African President, Cyril Ramaphosa skipped this month’s World Economic Forum gathering in Davos, Switzerland, because of the blackouts, which have led to harsh criticism of his government. The blackouts are expected to last for months.
South Africa, Africa’s most developed economy relies on coal to generate about 80% of its electricity. It plans to reduce that to 59% by 2030 by phasing out some of its 15 coal power stations and increasing its use of renewable energy. Its target is zero carbon emissions by 2050.
South Africa Has Received Pledges To Fund Its Energy Transition
South Africa has received pledges of up to $8.5 billion from the United States and other Western nations to fund its energy transition away from coal-burning plants and recently agreed to some parts of the loan funding at the U.N. climate conference in Egypt last year.
“As you know, South Africa is the first country with a just energy transition partnership to which the United States was proud to commit as a partner. This partnership represents South Africa’s bold first step towards expanding electricity access and reliability and creating a low-carbon and climate-resistant economy.”
Janet Yellen
Yellen has a mission of promoting American investment and ties. China has overtaken the U.S. in foreign direct investment in Africa, and trade between Africa and China soared to $254 billion in 2021, up about 35%.
Finance Minister, Enoch Godongwana opined that the U.S. still ranks among South Africa’s top trading partners.
“My hope is that this may continue,” Godongwana said.
Yellen is expected to hold a closed meeting with Ramaphosa and visit a U.S.-owned Ford car assembly plant.
U.S. ambassador to the United Nations, Linda Thomas-Greenfield is also on a tour to Africa, and President Joe Biden has said he plans to visit this year.
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