South Africa may approach the International Monetary Fund for the first time ever to help with funding to deal with the fallout from the coronavirus outbreak, Johannesburg’s Sunday Times reported, citing Finance Minister Tito Mboweni.
While the minister isn’t currently considering an emergency budget, he also advocates asking the World Bank and the New Development Bank for assistance, the newspaper said.
“In a conversation with the Reserve Bank and the Treasury I indicated that we should proceed and speak to the IMF and the World Bank about any facility that we can access for health purposes,” he said, according to the newspaper. “We take no ideological position.”
Africa is two to three weeks away from the worst of the coronavirus storm and needs an emergency economic stimulus of $100 billion to bolster preventative measures and support its fragile healthcare systems, according to the United Nations Economic Commission for Africa.
Almost half of the funds could come from waiving interest payments to multilateral institutions. That would give countries the fiscal space needed to impose social-distancing measures, widen social safety nets and equip hospitals to treat the sick ahead of an expected surge in infections, UNECA Executive Secretary Vera Songwe said by phone from Washington.
“If we want to have a fighting chance, we need it immediately,” she said. “In the next two to three weeks, if we act really decisively, we may be able to flatten the curve and then when the storm comes it will be not be as brutal as we see in Europe.”
One measure that can provide some immediate relief is the creation of the special purpose vehicle requested by African finance ministers through which interest payments on sovereign bonds could be sequestered and provide all countries on the continent, regardless of income level, with support, she said.
Source: https://www.bloomberg.com
