SA secures R5bn loan from AfDB to fight Covid-19

The African Development Bank has granted SA a R5bn loan, to support its fight against the Covid-19 pandemic, it announced in a statement late on Wednesday.

The fallout from the pandemic has pushed SA’s already weak government finances to their limit. With the consolidated budget deficit set to rise to 15.7% of GDP and debt levels expected to reach 81.8% this year, SA has been forced to turn to international financiers to seek concessional funding.Treasury director-general told Business Day last week, that negotiations with the IMF are complete and that SA was on track to receive the money by the end of July.

To ensure “a complementary intervention, the African Development Bank operation was designed in collaboration with other partners, including the International Monetary Fund, World Bank and the New Development Bank”, the AfDB said.

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Economists welcome R5bn AfDB loan but say it's a small portion of what SA needsThe African Development Bank (AfDB) said that the loan was to protect lives and promote access to essential medical equipment, to protect livelihoods by preserving jobs, and to support companies in the formal and informal economy.
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