SA is resilient enough to overcome the impact of coronavirus pandemic as long as its policies are recalibrated towards economic growth once the crisis has passed, according to the International Monetary Fund .
“The country’s big strength is that it has very deep and liquid domestic capital markets relative to most other emerging- market countries” and generates most of its financing domestically and in rand, Abebe Aemro Selassie, the director of the lender’s African department, said on Wednesday. “SA has always had very good international capital-market access” and is not in talks with the Washington-based institution about financing, Selassie said.Finance minister Tito Mboweni has raised the possibility of assistance from the fund for the first time to deal with the fallout from the virus, irking some senior officials in the ANC and its alliance partners, who argue this would undermine SA's sovereignty.
The country would seek only virus-related packages from international finance institutions instead of budget support that would probably require a structural adjustment programme, Mboweni said on Tuesday.The New Development Bank, which serves the Brics countries — Brazil, Russia, India, China and SA — has also confirmed it is in talks with the government for a loan of up to $1bn.
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Economic life beyond Covid-19 requires support from Brics or IMFFundamental problems with SA’s economy preceded the pandemic, and now there are no other ways to long-term growth Economy is another pandemic on the pipeline and can take us years to recover 🤦🏽♂️ Minor add on: Under the BRICS CRA, SA has access to only 30% of the US$10 billion - the 'De-linked portion” - as we don’t have an existing IMF program. Only the remaining 70% is accessible if a requesting party is engaged in an IMF arrangement.
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