AfDB approves first ever loan to South Africa amid coronavirus fight

23 Jul 20

South Africa has been granted its first ever crisis loan from the African Development Bank as it struggles against one of the world’s most serious outbreaks of Covid-19.

 

The loan of 5bn rand (£237m) will finance South Africa’s response to the virus, including buying protective equipment; preserving jobs, incomes and food security; keeping public services accessible and supporting the private sector to withstand the economic impact of the virus.

Even before the pandemic, South Africa was experiencing an economic slump, growing by just 0.2% in 2019, and the AfDB estimates a 6.3% contraction in 2020 – or 7.5% in a worst-case scenario.

The government implemented one of the continent’s strictest lockdowns and announced a 500bn rand (£23.7bn) stimulus package in March after confirming the country’s first case of the virus earlier that month.

But the poor growth forecasts have placed budgetary constraints on the government’s ability to deal with the crisis, the AfDB said.

The bank has also approved a £109m package of budget support to help Malawi, Madagascar, Mozambique and São Tomé & Príncipe deal with the virus, with special emphasis being put on protecting food systems and agriculture.

“We are in uncertain times,” said AfDB vice president Solomon Quaynor.

“The Covid-19 pandemic has actually revealed the lack of resilience that we have in the health sector, in our economies and in our ability to respond, and also in terms of the social safety nets available for the poorest and most vulnerable in our society.

“So this is no ordinary time and it calls for no ordinary response. The African Development Bank is going to be here to partner with the African countries and with the African private sector to make sure that we not only survive the Covid pandemic, but we thrive and recover with strength.”

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