The African Development Bank (AfDB) has approved a R5 billion ($288 million) loan to the government of South Africa, as the country battles one of the largest COVID-19 caseloads in the continent. South Africa is among the most affected nations with 381,798 confirmed cases and 5,368 deaths as of 22 July.
AfDB in a statement says that the funds will finance South Africa’s COVID19 response support program. The loan was drawn from the Bank’s $10 billion COVID19 response facility and is designed as a Crisis Response Budget Support Operation prepared following a request from the government of South Africa.
The South African government listed the purpose of the operation as;
- Protect lives and promote access to essential equipment to prevent infection, such as protective personal equipment, sanitizers, and gloves
- Protect livelihoods by preserving jobs, incomes, food security and access to essential public services
- Protect firms by supporting enterprises in the formal and informal economy to withstand the impacts of COVID-19 and prepare for economic recovery.
READ ALSO: East Africa Still Africa’s Fastest Growing Region – AfDB
AfDB opines that South Africa’s ability to respond to the pandemic has implications for neighboring countries and the continent seeing that the nation is Africa’s second-largest economy after Nigeria. The nation is facing challenges in the public health sector, including underfunding, pressure on capacity at public sector laboratories due to scaling of mass testing, and human resource shortages.
Further, the bank forecasts that the pandemic threatens to derail the gains made in controlling other infectious diseases such as TB and HIV/AIDS. There are also worries about the rising number of infections among health workers.
The pandemic compounded South Africa’s woes as it had been experiencing an economic slump. For instance, the nation recorded the lowest GDP growth in a decade registering a paltry 0.2 percent growth rate in 2019. The situation could be worse as AfDB projects a GDP contraction in 2020 of 6.3 percent and 7.5 percent under baseline and worst-case scenarios respectively.
RELATED
AfDB Policy Reforms for African Economies
AfDB Posts a Grim Outlook for African Economies
