US Treasury's No. 2 urges South Africa to boost fight against corruption

U.S. Deputy Treasury Secretary Wally Adeyemo on Wednesday urged South Africa to step up its battle against corruption, saying that work could help boost job creation in a country facing an unemployment rate of 43% among those under 35. Adeyemo highlighted the need for increased anti-corruption efforts, continued work to accelerate South Africa's just transition to renewable energy, and steps to foster growth in its diverse service sector in a speech prepared for the American Chamber of Commerce in Johannesburg.

U.S. Deputy Treasury Secretary Wally Adeyemo on Wednesday urged South Africa to step up its battle against corruption, saying that work could help boost job creation in a country facing an unemployment rate of 43% among those under 35.

Adeyemo highlighted the need for increased anti-corruption efforts, continued work to accelerate South Africa's just transition to renewable energy, and steps to foster growth in its diverse service sector in a speech prepared for the American Chamber of Commerce in Johannesburg. U.S. Treasury Secretary Janet Yellen hammered home similar messages during her visit to South Africa just over a year ago.

"Investments alone cannot unlock the potential of your economy," Adeyemo said on the third day of his visit to the United States' biggest trading parter in Africa. "My conversations with South Africans from a diversity of backgrounds makes clear that progress on reliable energy and addressing all the other challenges this great country faces is inhibited by corruption."

Adeyemo, whose visit includes stops in Cape Town, Pretoria and Johannesburg, said Washington stood ready to build upon a joint effort to combat illicit wildlife trafficking - a trade fueled by corruption and organized crime - that both countries launched during Yellen's visit last year. "We want to build upon this work to leverage international frameworks to combat corruption and promote transparency in various sectors, ensuring that resources are allocated efficiently for the benefit of all citizens," Adeyemo said.

He noted that U.S. Treasury Department recently released its National Risk Assessment on Money Laundering, which highlights the costs of corruption in the U.S. and how to end it. "No nation is immune from these challenges. We humbly want to be your partner as the South African people take steps to address corruption," he said.

Doing so, he said, would create a positive environment for job creation in South Africa, given the high unemployment rate among young people and challenges in its educational system. Adeyemo's trip comes amid strains between Washington and Africa’s most industrialized economy over Russia's February 2022 invasion of Ukraine, and more recently Pretoria's criticism of Israel's offensive in Gaza.

Corruption has been an ongoing challenge in South Africa, which was added to the "grey list" of countries under special scrutiny by the international financial crime watchdog, the Financial Action Task Force (FATF), last year. Adeyemo also urged South Africa to summon the political will to make decisions needed to modernize its electrical grid and enable new generation sources to come online, saying more transmission investments were needed to jumpstart the country's energy transition and solve its energy crisis.

To help smooth the transition, South Africa also needed "the right economic incentives" to persuade companies to invest in extraction of critical minerals, Adeyemo said. "This can and must be done in a way in which the benefits of investments in this sector are not concentrated in the hands of a few," he said, adding that the United States was ready to continue supporting efforts to build clean energy supply chains that invested in workers and protected the environment.

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