Finance Minister Enoch Godongwana said a $720 million Development Policy Loan (DPL) from the World Bank came with favorable conditions. During the virtual meeting, MPs sought to determine whether the loan was justified and what it would cost to maintain the facility. “Given its terms and conditions, which were acceptable to us, compared to what is available in the market, we opted for the World Bank loan,” Godongwana said.
This World Bank DPL supports the implementation of South Africa’s economic reconstruction and recovery plan. The funding is a low-interest loan that contributes to the government’s fiscal relief program while reinforcing South Africa’s decisions on how best to provide relief to the economy and those most affected by the crisis. current situation, the government said in an earlier statement.
According to, Dennis Webster of New frame, South Africa dipping its toes into the World Bank pool for the first time sends an important political signal. Having so far escaped the original sin of not being able to borrow long-term in its own currency, the country currently has low levels of borrowing in dollars. But if his chronic budget situation — he already spends more on debt repayment each year than on health care — gets worse, the potential for dollar borrowing in the future is huge, Webster wrote.
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South African currency (file photo).
