SA looking to raise R95bn from IMF, Brics Bank and World Bank

This would be over and above the R500 billion relief funds announced by the president.

Treasury director-general Dondo Mogajane | Image: Twitter

Following Finance Minister Tito Mboweni’s announcement of the Covid-19 relief amounts being offered to South Africa by global institutions, Treasury director-general Dondo Mogajane has confirmed that Treasury is looking to raise R95bn from multilateral institutions and development banks.

The funds will reportedly go towards business support, job creation and protection of existing jobs in the current economic climate.

Speaking at a briefing held last Friday aimed at breaking down how the R500 billion Covid-19 economic relief package announced by President Cyril Ramaphosa will be spent, Mboweni addressed concerns about funding from the International Monetary Fund (IMF) and other international institutions by stating that that the support provided by the IMF and other institutions during this period was specific to Covid-19.

“It’s not the usual budget support or policy intervention or technical assistance and conditionality and things like that.”

According to Mbwoweni, the IMF had previously indicated that South Africa is eligible for up to $4.2 billion in funding while the World Bank was offering between $55 million and $60 million in assistance.

This was in addition to the $1 billion in relief that the New Development Bank, linked to Brics, had set aside for South Africa should the need arise.

Nearly a week after Mboweni’s address, Mogajane broke down the specific loan amounts that government would apply for in a presentation to several parliamentary committees on Thursday.

According to Business Live, the director-general said $50m would be raised from the World Bank, $1bn from the New Development Bank (Brics Bank), and $4.2bn from the International Monetary Fund (IMF), giving a total of $5.07bn which equals R95bn at the current exchange rate.

These funds would be over and above the R500 billion announced by the president.

Mogajane reassured meeting participants that the funding costs of this borrowing would be favourable before noting the risks to multilateral development bank funding.

Among these risks is the fact that South Africa would be competing with other countries for funding.

He also advocated for the interrogation of the loan covenants and general conditions set out by the institutions.

Watch the meeting below: