The World Bank announced on Friday morning that it had approved South Africa’s request for $750-million (about R11.4-billion) loan.
"This loan will support the government of South Africa’s efforts to accelerate its Covid-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery," the World Bank and SA’s National Treasury said in a joint statement.
This completes the country's aim to secure R95-billion from multilateral institutions.
In July 2020 the International Monetary Fund granted SA a $4.3-billion (around R70-billion at the time) loan to support job creation and protection for businesses impacted by the Covid-19 pandemic. In April 2021, it was announced that SA would get a $1-billion (R14.5-billion at the time) loan from the New Development Bank (NDB). The NDB is a development finance institution established by Brazil, Russia, India, China and SA as part of the BRICS grouping.
The World Bank and Treasury said on Friday that the "low interest" $750-million development policy loan (DPL) is meant to support the country’s implementation of the country's Economic Reconstruction and Recovery Plan. According to the statement it will enhance financial sector stability - specifically the establishment of a deposit insurance scheme, and will support SA’s "commitment to climate change".
"The World Bank budget support is coming at a critical time for us and will contribute towards addressing the financing gap stemming from additional spending in response to the Covid-19 crisis," Treasury director general Dondo Mogajane said.
"It will assist in addressing the immediate challenge of financing critical health and social safety net programs whilst also continuing to develop our economic reform agenda to build back better."
Marie Françoise Marie-Nelly, the World Bank’s director for South Africa said the loan would provide relief "from the impacts of the most serious economic crisis South Africa has experienced in the past 90 years, while tackling long-standing challenges to growth and development."
"This support aims to put the country on a more resilient and inclusive growth path by leveraging South Africa’s strength to mitigate the effects of the Covid-19 crisis through their strong social safety net and by advancing critical economic reforms."