The International Monetary Fund has approved $4.3bn in aid to South Africa to help the country fight the coronavirus pandemic.
"The IMF approved $4.3bn in emergency financial assistance under the Rapid Financing Instrument to support the authorities' efforts in addressing the challenging health situation and severe economic impact of the COVID-19 shock," the Washington-based crisis lender said in a statement.
South Africa is the continent's most-industrialized economy and has the largest number of detected COVID-19 cases, with more than 445,000 and 6,769 deaths as of Monday, according to the Africa Centres for Disease Control and Prevention.
Deputy managing director Geoffrey Okamoto said "a deep economic recession is unfolding," exacerbated by South Africa's slow rates of growth, high unemployment and widening inequality."
The RFI money will help address the country's balance of payment needs "that emerged as a result of the pandemic and thus contain the economic disruption and its regional spillovers."
The money will specifically address "the fiscal pressures posed by the pandemic, limit regional spillovers and catalyze additional financing from other international financial institutions, the IMF said."
The Minister of Finance, Tito Mboweni, presented a Special Adjustments Budget in Parliament on June 24, as part of government’s key interventions to the Covid-19 pandemic.
According to Treasury, the country has been hard hit by the pandemic, and this required government to come up with fiscal and monetary measures that would respond to the struggling economy and contain its negative effects to society.
"The additional IMF funding is a low interest loan that contributes to government’s fiscal relief package while respecting South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis. It will also pave the way for government to provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy,"Treasury said in a statement.
Meanwhile, both the New Development Bank and the African Development Bank have agreed to loans of $1 billion (R17.3 billion) and R5 billion respectively.