The World Bank has approved South Africa’s $750 million (around R11.4 billion) loan request as part of efforts to address the socio-economic impact of Covid-19 and bolster economic recovery, the National Treasury confirmed on Friday.
“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,” Dondo Mogajane, director-general of the National Treasury 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.”
On the African continent, South Africa has been the most drastically affected by the Covid-19 pandemic, recording over three million infections to date.
Successive lockdowns saw many businesses shutting down and others implementing retrenchments which led to a record-high rate of unemployment.
World Bank country director for South Africa, Marie Françoise Marie Nelly, says this loan will assist the government in turning the tide for the economy.
“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,” Marie Nelly said.
Palesa Mofokeng is a Moneyweb intern.