World Bank approves $750m Covid-19 loan for SA

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The World Bank has approved SA’s request for a $750m (R11.43bn) low-interest loan aimed at supporting an economic recovery from Covid-19.

The funds will be used to accelerate its Covid-19 response aimed at protecting the poor and vulnerable from the adverse socioeconomic impacts of the pandemic, the Treasury said in a statement.

Since the beginningof the pandemic the World Bank has shelled out $157bn in Covid-19 funding, the fastest and largest crisis response in its history.

The Covid-19 pandemic prompted SA’s worst recession since World War 2, particularly hitting labour-intensive parts of the economy such as tourism and the restaurant industry.

Also in 2020, the African Development Bank had approved a loan of $288m.

“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,” director-general of the Treasury Dondo Mogajane said on Friday.

As the second largest economy in Africa, SA’s economic performance has spillover effects on other countries in the region, and recovery and successful economic development will provide an economic boost to the whole region, the Treasury explained.