SA secures $750m World Bank loan to help with COVID response

Treasury said that the loan would address the financing gap stemming from additional spending in response to the pandemic.

FILE: A person walks by the building of the Washington-based global development lender, The World Bank Group, in Washington on 17 January 2019. Picture: Eric BARADAT/AFP

JOHANNESBURG - National Treasury said that the World Bank had approved a $750 million development policy loan for South Africa.

The facility is meant to help our government with its COVID-19 response and is in line with the World Bank’s crisis response approach aimed at protecting lives, livelihoods and supporting a more inclusive and resilient growth path.

The loan, which amounts to over R11 billion, comes after months of difficult negotiations with the World Bank.

Former Finance Minister Tito Mboweni even quipped that the World Bank can keep its cents when it appeared that the institution was seeking to dictate policy in exchange for the funds.

In the statement issued by Treasury this morning, Director-General Dondo Mogajane said that the support came at a critical time and would address the financing gap stemming from additional spending in response to the COVID-19 crisis.

In 2020, the country secured loans from the International Monetary Fund, the New Development Bank and the Africa Development Bank to fund for the same function.

Treasury said that the latest loan was at low interest and would contribute to the government’s fiscal relief package.

The conditions attached to the transaction were not disclosed.