IMF to rescue SA with an emergency loan
It’s been months since the country has been navigating through turbulent waters since hit-hard by a pandemic causing endless suffering for many.
The dark cloud seems to have a silver lining for South Africa as the International Monetary Fund (IMF) has agreed to loan South Africa an amount estimated to be 70.6bn. On Monday night, the National Treasury announced that the IMF board has approved the government’s request for “emergency financial support”.
The loan will help the country to stabilise the economy and further help to rescue those hard-hit by the pandemic. The “emergency loan” is also going to aid the country to lighten the adverse social and economic impact of the COVID-19 pandemic.
Finance Minister, Tito Mboweni said:
“Government’s COVID-19 economic support package directs 500bn directly to the problem. This is one of the largest economic response packages in the developing world. The South African Reserve Bank has reduced interest rates and made it easier for banks to lend money, and supported liquidity in the domestic bond market,”
Mboweni further stated that government’s spending and tax proposals as well as the loan guarantee scheme and wage protection measures, are providing protection to workers and the poor while assisting to stay afloat during these tough economic times.
Moreover, Finance Minister emphasised that going forward our fiscal measures will merely build on our policy strengths and further limit the existing economic vulnerabilities which have been accelerated by the COVID-19 pandemic.
Additionally, the statement outlined that the relief package, of which the IMF loan forms part, would support health and front line services and further protect the most vulnerable and marginalised, while simultaneously helping to catalyse job creation, and unlocking economic growth through reforms and most importantly stabilise public debt among other things
The funds are estimated to be in SA by next month.