According to the IMF, Pretoria has access to financing under the Fund’s rapid financing instrument to cushion the negative economic impacts of the Covid-19 pandemic.
This “emergency financial support” comes with very low interest rates compared to the higher borrowing costs that the country typically faced.
Under the IMF’s Special Drawing Rights, the loan would be payable over three to five years at an interest rate of just over one percent, the US-based financial body said.
This is the first time that Pretoria has obtained an IMF loan since the dawn of democracy in 1994.
More than seventy countries have received financial assistance from the IMF to help them in their efforts to cushion the impact of the Covid-19 pandemic, the IMF said.
The IMF’s low-interest loan comes after the African Development Bank last week approved a $280 million loan to South Africa under the AfDB’s response facility to fight against the Covid-19 pandemic.
Additionally, Pretoria recently secured a $965 million loan from the New Development Bank (NDB) to help the country with its Covid-19 emergency program.
The NDB is a financial institution operated by a group of emerging economies including Brazil, Russia, India, China and South Africa, commonly referred to as the BRICS countries.
In total, South Africa has obtained more than US$ 5.3 billion in financial assistance from international financial institutions, according to Finance Minister Tito Mboweni.
For its part, the country has spent US $30 billion of its own financial resources to help alleviate the problems exposed by the pandemic, which has killed more than 6,000 people since its onset in March of this year, the Minister revealed on Monday.