The International Monetary Fund (IMF) Executive Board has approved a US$4,3-billion loan for South Africa to help the country weather the Covid-19 health crisis on the economy, National Treasury said late on Monday.
“The IMF Executive Board has approved South Africa’s request for emergency financial support under the Rapid Financing Instrument (RFI) for an amount of US$4,3 billion to help the country mitigate the adverse social and economic impact of the Covid-19 pandemic,” the treasury said.
Treasury added that this was a low interest loan that would contribute to government’s fiscal relief efforts while respecting South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis.
“It will also pave the way for government to provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy,” the treasury said.
South Africa has been driven deeper into an economic recession by the health crisis and government reached out to international financial institutions, including the World Bank, for backing for a R500 billion package to shore up the economy and be able to afford extending relief to poor communities and struggling companies.
Treasury reiterated on Monday that the measure termed the country’s “extraordinary Covid-19 budget” by President Cyril Ramaphosa will support the national health services, protect the poor, drive job creation, stimulate the economy through reforms and stabilise the spiralling public debt.