South Africa: AFDB grants USD300 million loan to fight COVID-29 pandemic

The African Development Bank (AfDB) on July 23 has approved a 5 billion rand (USD300 million) loan to the South African government to help it fight the COVID-19 pandemic and support its budget, according to a news report by 'Today'.

Africa's most industrialized economy was in recession even before COVID-19 started ravaging its economy. Forecasts are now for gross domestic product to shrink by at least 7 percent this year, and a budget deficit of around 15 percent of GDP.

The country has recorded the most coronavirus infections in Africa, with more than 380,000 cases.

The AfDB said in a statement that the loan was to protect lives and promote access to essential medical equipment, to protect livelihoods by preserving jobs, and to support companies in the formal and informal economy.

"South Africa's ability to respond to the pandemic has implications for neighboring countries as well as the continent as a whole," the bank said.

South Africa has also approached the International Monetary Fund for financial support in its fight against the coronavirus. The IMF is expected to consider its request next week.

The development bank of the BRICS group of nations approved a USD1 billion COVID-19 loan for South Africa earlier this year.