"This Country Is Finished": South Africans Questioning SA's New Loan of R11.5 Billion From the World Bank

"This Country Is Finished": South Africans Questioning SA's New Loan of R11.5 Billion From the World Bank

  • South Africa will be receiving a R11.5 billion loan from a global financial institution, the World Bank
  • The World Bank and the South African National Treasury say the loan would be used to help low-income families deal with the impacts of the Covid19 pandemic
  • South Africans are questioning the reasons South Africa needs another loan and are concerned that it will be looted

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JOHANNESBURG - The World Bank agreed to grant South Africa a low-interest loan of R11.5 billion to help the country recover from the effects caused by the Covid19 pandemic. The announcement was made on Friday, 21 January.

The World Bank says this will load will assist Mzansi in better responding to the pandemic as well as accelerate the government's assistance of South Africans from poorer and low-income backgrounds dealing with the socio-economic impact of Covid19.

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South Africa, $750 million loan, the World Bank, boost economy, R11.5 billion, National Treasury
South Africa will be getting a low-interest loan of R11.5 billion from the World Bank. Image: Phill Magakoe
Source: Getty Images

According to the joint statement issued by the World Bank and National Treasury, the loan will also help South Africa implement the Economic Reconstruction and Recovery Plan, reports Fin24.

The National Treasury added that the funds being loaned to South Africa will also help assist in the health and social net safety programmes.

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This is not the first loan that has been granted to South African since the pandemic began. In July 2020, the World Bank granted SA a loan of R70 billion which was to be for job creation as well as the protection of businesses affected by the pandemic.

Another loan of R14.2 billion was granted in April, 2021, however, this loan was offered by the New Development Bank (NDB), a financial institution established by the BRICS countries (Britain, Russia, India, China and South Africa).

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SABC News reports that with this new loan from the World Bank, South Africa's debt service costs could be just over R1 trillion.

South Africans are concerned about SA's rising debt

On social media, South Africans raised concerns about the continuous loans the country keeps getting. Some people believe that the South African government should be focused on repaying the money instead of borrowing more. Others have stated that the loan will disappear because of corruption.

Here are some comments:

@PereDaHorse said:

"Why would you borrow a foreign denominated currency when you won't use it for any foreign transactions? South Africa has a reserve bank that's capable of doing what IMF is doing, the worst part is that SA has stable foreign reserves."

@maxwell_mncwabe said:

"The only thing left now is for major lenders to change the name of this country because there's no more SA, its people are also on loan, this country is finished, SOLD to the biggest bidders."

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@ModishaRichie said:

"Kanti why aren't we focusing on settling the debt, why are we still borrowing? Russia did it, SA can do it! Why borrow and borrow and borrow?"

@john_emjay said:

"So the @MYANC are actually not willing to improve the economy of this country. The country is already struggling to repay its debt but the ANC government keeps on borrowing money, the worst is that the money that is borrowed always get looted and benefit their families."

SA included in IMF's R9 trillion emergency funding, SA to get R65bn

In other business news, Briefly News previously reported that the International Monetary Fund (IMF) is releasing the largest amount of money in emergency funding in its history.

The IMF board of governors have agreed to the allocation of $600 billion (R9 trillion) in emergency funding. The funding was generated to help countries fight and recover from the Covid-19 pandemic.

South Africa will get R65 billion injected into its economy and will help the government recover from the pandemic and violent unrest according to eNCA.

Source: Briefly News

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