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2020-04-26

South Africa seeking $5 billion from multilateral lenders to combat the virus-Official Treasury

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The most advanced economy in Africa is talking to the International Monetary Fund (IMF), the World Bank, the BRICS' New Development Bank and the African Development Bank to provide funding to contribute to a 500 billion rand rescue package to cushion the impact of the new coronavirus on businesses and poor households.

The IMF has said that South Africa has the right to apply for up to $4.2 billion in response to the crisis, and Finance Minister Tito Mboweni said the government could negotiate on Friday at the World Bank for a "maybe between $55 and $60 million" facility.

In an interview with eNCA television on Sunday, Dondo Mogajane, director-general of the National Treasury, said South Africa "will certainly go" for IMF funding.

"The World Bank said ... South Africa can access a loan of approximately $50 million, the New Development Bank said a long time ago that they set aside a billion dollars that we can access, and we're going to access that again," Mogajane said.

"All in all, all of these interventions, we are currently looking at 95 billion rand coming from these institutions only for COVID-related interventions." Mogajane said the government must do everything it can to ensure that the coronavirus is contained, including reprioritising money from projects that are not a priority for now and seeking new cheap money.

"I'm highlighting new cheap money because the discussions at the moment should obviously focus on what the term rates are going to be. That's where we're, we're talking with them (lenders),' he said.

"The IMF said it's 1 percent interest that's available so we'll definitely go for it because it's cheap." Mboweni played off worries on Friday in some governing party circles and in the influential trade union movement that the money would come with onerous conditions

An IMF official told Reuters that no requirement for a structural adjustment program came from the emergency funds on offer.

The economy was in recession when South Africa was hit by the virus outbreak and public finances were already strained as the government bailed out struggling state companies.

As of Saturday, South Africa had recorded 4,361 cases, including 86 deaths, with 161,004 people testing for the virus

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