South Africa’s request for a $750 million development policy loan (DPL) from the World Bank has been approved.
According to a statement released on Friday, the World Bank group board of executive directors confirmed the loan approval, which is aimed at supporting government’s efforts in accelerating its Covid-19 response.
‘Protecting the poor’
The DPL is reportedly aimed at “protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery.”
“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,” said Director-General of National Treasury Dondo Mogajane.
“It will assist in addressing the immediate challenge of financing critical health and social safety net programs whilst also continuing to develop our economic reform agenda to build back better.”
Boosting SA economic recovery
The DPL is also a move to bolster the implementation of South Africa’s economic reconstruction recovery plan.
Treasury said the loan was a low-interest one that complemented support by the International Monetary Fund, the African Development Bank and the New Development Bank.
“With this DPL, we have partnered with the government to provide much-needed relief from the impacts of the most serious economic crisis South Africa has experienced in the past 90 years, while tackling long-standing challenges to growth and development.
“This support aims to put the country on a more resilient and inclusive growth path by leveraging South Africa’s strength to mitigate the effects of the COVID-19 crisis through their strong social safety net and by advancing critical economic reforms,” said World Bank Country Director for South Africa, Marie Françoise Marie Nelly.
Nelly said the DPL built on the country’s “new World Bank Group Country Partnership Framework”, from 2022 to 2026, to help “stimulate investment and job creation.”
Since the start of the Covid-19 pandemic, more than $157 billion has been contributed by the World Bank, helping more than 100 countries protect jobs and strengthen preparedness.
Of the over 50 low and middle-income countries supported by the World Bank, more than half of these are in Africa.
$20 billion will be made available by the World Bank, to purchase and distribute Covid-19 vaccines until the end of the year.