South Africa to borrow R11.3 billion from World Bank for Covid-19

Mandy Wiener interviews Jannie Rossouw, Visiting Professor at Wits Business School.

The World Bank has approved a R11.3 billion (US$ $750 million) loan to South Africa, National Treasury announced on Friday.

The loan, which came after months of difficult negotiations, is intended to help the government’s Covid-19 response.

The World Bank loan follows on others obtained to fight Covid-19 in 2020 from the International Monetary Fund, the New Development Bank and the African Development Bank.

Treasury says the World Bank loan has a "low" interest rate.

Mandy Wiener interviewed Jannie Rossouw, Visiting Professor at Wits Business School about the approved development policy loan from the World Bank to assist with Covid-19 (scroll up to listen).

… It’s not that much. Our government borrows annually over R200 billion… Whatever money is borrowed… must be paid back by South African taxpayers.

Jannie Rossouw, Visiting Professor - Wits Business School

It merely makes reference to a ‘low interest' loan. I would’ve wanted more information on what the actual interest rate is… This loan has an exchange rate risk. We borrow in US dollars…

Jannie Rossouw, Visiting Professor - Wits Business School

The government has reached the end of its fiscal means… We should be very careful in making new demands on the government for more spending… High-income earners are emigrating…

Jannie Rossouw, Visiting Professor - Wits Business School

The biggest risk is towards South African taxpayers who are members of pension and retirement funds in South Africa…

Jannie Rossouw, Visiting Professor - Wits Business School

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