The World Bank Group Board of Executive Directors has approved South Africa’s request for a $750 million development policy loan (DPL). 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 funding is a low-interest loan that contributes to the government’s fiscal relief package while reinforcing South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis. The loan complements support by the International Monetary Fund, the African Development Bank, and the New Development Bank as part of the Government of South Africa’s broader financing strategy to access external financing from international financial institutions.
As the second-largest economy in Africa, South Africa’s economic performance has spill-over effects on other countries in the region. Its recovery and successful economic development will provide an economic boost to the whole region.
While this loan will plug some holes it will be interesting to see the impact when the Finance Minister tables his budget on the 23rd of February.