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International Monetary Fund Approves COVID-19 Loan

July 29, 2020

National Treasury

National treasury has confirmed that the International Monetary Fund Executive Board has approved South Africa’s request for emergency financial support.

In a statement, treasury added that the support flows from the Rapid Financing Instrument for an amount of US$4.3 billion to help the country mitigate the adverse social and economic impact of the Covid-19 pandemic.

“The additional IMF funding is a low interest loan that contributes to government’s fiscal relief package while respecting South Africa’s decisions on how best to provide relief to the economy and those worst affected by the current crisis.”

Treasury indicated that the funding will also allow government to “provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy”.

Meanwhile, treasury recently briefed parliament on the Adjustments Appropriation Bill.

The bill was tabled in parliament on 24 June 2020 as part of the Special Adjustments Budget in response to the Covid-19 pandemic.

The Adjustments Appropriation Bill aims to:

• effect adjustments to the appropriation of money from the National Revenue Fund for the requirements of the State in respect of the 2020/21 financial year; and
• provide for matters incidental thereto.

The standing committee on appropriations also recently sought comment on a proposed amendment to Section 6 of the Appropriation Act of 2020.

The proposed amendment makes reference to the second Adjustments Appropriation Bill introduced in parliament.

During the briefing, treasury pointed out that the fiscal and economic impact of the national state of disaster declared as a result of the COVID-19 pandemic made it necessary for the finance minister to table a special adjustments budget to revise government’s spending priorities for 2020/21.

Treasury also clarified that all other adjustments not included in the adjustments budget will be included in the October 2020 adjustments budget, with the details outlined in the Adjusted Estimates of National Expenditure.

Treasury also indicated that any proposed additions to one budget vote must come from reductions to another vote.

The national assembly is scheduled to debate the bill on 29 July 2020.