South africa gets a loan of $ 4.3 billion from the IMF - The Point

It's official, the south african government will soon benefit from a significant degree of flexibility in order to face the economic and social consequences of

South africa gets a loan of $ 4.3 billion from the IMF - The Point

It's official, the south african government will soon benefit from a significant degree of flexibility in order to face the economic and social consequences of the health crisis, the Covid-19. It will be recalled, South Africa is the epicentre of the epidemic on the african continent with more than 450 000 cases, of which 7 067 death. On a global scale, it ranks in the fifth position of the countries with the highest number of infections. The mortality rate remains low (1.6% of cases). But it could be very widely under-estimated. According to researchers, about 17 000 additional deaths not accounted for among the dead of the Covid-19, have been recorded since the beginning of the month of may, compared to the same period last year. The Health minister, Zweli Mkhize, has warned that " the peak [of the pandemic] will be in July, August and September." The board of directors of the international monetary Fund has provided emergency assistance in the amount of $ 4.3 billion, or approximately 3.7 million euros, while the country's economy, already shaky, is put to the test by the pandemic, has announced the institution in a press release.

In fact, the country has imposed, at the end of the month of march, one of the confinements the most stringent in the world, before you soften it. Before the explosion of the contamination, the schools come again to be closed for a month, and a night-time curfew has been reinstated.

The aid comes at a time when the african national Congress (ANC) in power has always refused to call on the support of the IMF to support its economy, an ideological position which is in the process of evolving. At the end of April, the minister of Finance of South Africa, Tito Mboweni, had indicated that the government intended to ask the IMF for a financial assistance of up to $ 4.2 billion to deal with the pandemic of the sars coronavirus.

Read also Covid-19 : the dual challenge of national and continental of Cyril Ramaphosa

The international monetary Fund has approved financial assistance under its rapid financing instrument " to support the efforts of the authorities, who are facing a difficult health situations and the serious economic consequences of the shock caused by the Covid-19 ", he says.

The IMF notes that the pandemic coincides with a difficult period for the country. "With serious structural constraints to growth, economic activity has weakened during the last decade, in spite of public expenditure is important, and this has led to high unemployment, fed the poverty and income inequality ", details there.

As in other emerging economies, the volatility in financial markets increased during the pandemic. "But the financial system is resilient," says the Fund. Help South Africa, which is expected to see its GDP contract by 8% this year, it is also possible to limit the impact of the crisis at the regional level, notes the IMF.

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Read also Covid-19 : South Africa questions its strategy

Responding to the emergency of an economy of breath

The authorities are committed to manage the emergency financial assistance of the IMF, " transparency ", the statement continues. "Once the pandemic is finished, it will be urgent to ensure the sustainability of the debt and implement structural reforms to sustain recovery and achieve a sustainable and inclusive growth ", emphasized the Fund.

on Monday, the ministry of Finance of south africa has stated in a press release that the priority is to reorient budget expenditures in favor of measures to combat the health crisis, and economic.

The aid package will allow us to "support the health and services of first necessity, "" protecting the vulnerable ", "stabilize the creation of jobs," as well as "unlocking economic growth through reform" and " stabilize the public debt ", details the text.

"The public spending and tax proposals, as well as the loan guarantee scheme and measures for the protection of wages, provide protection for workers and the poor, while helping them to stay afloat in these difficult economic times," responded Tito Mboweni, was quoted in the press release.

Guard

The issue of transparency has become central in the fight against the epidemic. Already, Khusela Diko, the spokesperson of the head of State of south africa Cyril Ramaphosa, who is suspected of being involved in corruption in a contract of protection equipment against the Covid-19, has been put off, said the presidency on Monday.

The husband of Khusela Diko, King Madzikane II Diko, runs a business, Royal Bhaca, which would, according to the newspaper Sunday Independent, 19 July, got it illegally, a contract for the supply of equipment for the protection of health.

In a post published last week on Facebook, Khusela Diko had responded by "denying" the allegations.

In a nationally televised address Thursday, the president had announced that a thirty investigations were ongoing in the country for theft and misappropriation of funds allocated in the framework of the fight against the pandemic. He stated that he was " determined to ensure that each corruption case should be the subject of a thorough investigation and that those responsible for wrongdoing are prosecuted ". South Africa has already mobilized a little over a billion dollars of funding official for the pandemic with development banks.

also Read South Africa : the justice puts pressure on Cyril Ramaphosa

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Updated Date: 28 July 2020, 12:33

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