(3 minutes read)
· The International Monetary Fund’s executive board will meet shortly to consider South Africa’s request for a Covid-19 response loan
· Some sections of the ruling party –ANC- is against the country seeking a loan from the multilateral organization on the ground that it would add up its external debt, which is already very high
· It is important to note that the Covid-19 loan, which falls under the “rapid financing instrument” of the IMF, is not subject to the same stringent conditions that the IMF imposes
The International Monetary Fund’s executive board will meet shortly to consider South Africa’s request for a Covid-19 response loan. Coming after months of engagements between the SA’s National Treasury and the IMF management, the meeting is crucial to South Africa, which is seeking a loan of US$4.2 billion from the multilateral institution.
Some sections of the ruling party –ANC- is against the country seeking a loan from the multilateral organization on the ground that it would add up its external debt, which is already very high. It is important to note that the Covid-19 loan, which falls under the “rapid financing instrument” of the IMF, is not subject to the same stringent
conditions that the IMF imposes.
The government sources point out that the loan being sought will not “undermine” national sovereignty. South Africa’s finance minister Gordon Mboweni said he also had the support from the ANC to approach the IMF. Government has put together a R800 billion response a combination of fiscal and monetary policy interventions – in a bid to
mitigate the impact of the Covid-19 pandemic.
