The World Bank Group Board of Executive Directors approved a $750 million development policy loan (DPL) for South Africa.
The loan will support the Government’s efforts to accelerate its COVID-19 response 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 DPL supports the implementation of South Africa’s Economic Reconstruction and Recovery Plan (ERRP) and is well aligned with the World Bank’s Crisis Response Approach aimed at protecting lives, livelihoods and supporting a more inclusive and resilient growth path.
It reflects priorities to modernize the country’s social protection and health services and to improve delivery systems which will apply even beyond the pandemic. It also enhances financial sector stability, specifically the establishment of a deposit insurance scheme. It further supports South Africa’s commitment to climate change.
“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. 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.” Dondo Mogajane, Director General of National Treasury of South Africa.
The fund is a low interest loan that contributes to the government’s fiscal relief package while reinforcing South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis.
The loan complements support by the International Monetary Fund, the African Development Bank, and the New Development Bank as part of the Government of South Africa’s broader financing strategy to access external financing from international financial institutions.
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