South Africa gets $4.3 bln IMF facility to help fight covid-19, balance of payment
The International Monetary Fund (IMF) on Monday said it has approved South Africa’s request for emergency financial assistance of S$ 4.28 billion under the Rapid Financing Instrument (RFI) to meet the urgent balance of payment (BOP) needs stemming from the outbreak of the COVID-19 pandemic.
IMF in a statement said the RFI is 100 percent of South Africa quota, noting that the pandemic is evolving in the country at a challenging time.
“With severe structural constraints to growth, economic activity has weakened over the last decade despite significant government spending, resulting in high unemployment, poverty, and income inequality. Like in other emerging economies, financial market volatility has increased during the pandemic, but the financial system is showing resilience,” IMF said.
It said the RFI will help fill the urgent balance of payment need originating from the fiscal pressures posed by the pandemic, limit regional spillovers, and catalyze additional financing from other international financial institutions.
“It will complement the authorities’ strong policy response to the crisis and their planned post-COVID-19 fiscal consolidation and reforms to promote growth that benefits all South Africans. The authorities have committed to manage the IMF’s emergency financial assistance with full transparency and accountability.
The Fund had in May approved $3.4 billion RFI for Nigeria to enable the West African country cope with the disruption arising from the fight against coronavirus.