South Africa is seeking to acquire R95 billion of funding from global financial institutions to address the coronavirus social and economic crisis. President Cyril Ramaphosa has announced a R500 billion stimulus package aimed at cushioning the economic impact of the pandemic.
The country moves to level-4 of the lockdown from the first of May. While some of the funds for the stimulus package will come from reprioritisation of the budget as well as a partial reopening of the economy, negotiations are in progress with the International Monetary Fund (IMF), World Bank, the BRICS New Development Bank as well as the African Development Bank to source funding.
The IMF has said South Africa is entitled to apply for up to $4.2 billion dollars in response to the crisis and Finance Minister Tito Mboweni said on Friday that government could negotiate for a facility of “maybe between $55 and $60 million” at the World Bank.
Mboweni said COVID-19 expenditure has changed the fiscal framework and he will soon be tabling a new budget bill before Parliament.
He also said that, together with the Reserve Bank, over R800 billion in interventions are being made to assist the economy and the fight against coronavirus. The rest of the country’s relief package would be financed by a mix of R130 billion of reprioritised spending and other local sources.
South Africa has recorded 4 361 cases. The country has registered 86 deaths. More than 161 000 people have been tested for the virus as of Saturday.
Breakdown of the stimulus package below:
Loading…
Rating Agency Moody’s says SA’s economy should recover
Ratings agency Moody’s says South Africa’s economy will contract by 6.5% in 2020. Moody’s says the R500 billion stimulus package announced by President Ramaphosa will weaken public finances and constrain government’s ability to provide support to state-owned entities such as South African Airways (SAA) and Eskom.
However, Moody’s says research shows that economic growth should recover by 4.5% in 2021. The stimulus package announced by President Ramaphosa equals to 10% of the GDP of Africa’s most industrialised nation.
