‘Revenue shortfall justifies seeking loans from IMF, World Bank’

JOHANNESBURG – The government said the expected rise in revenue shortfall this year justified going to international financial markets for loans in order to mitigate the impact of the coronavirus pandemic on the economy.

The government has been facing criticism, even from the governing party’s alliance partners for approaching the International Monetary Fund (IMF) and the World Bank for R95billion in Covid-19 loans, in addition to fiscal reprioritisation.

Last month, the IMF approved a short-term liquidity line to provide emergency financial assistance and debt relief to member countries facing the economic impact of Covid-19.

Finance Minister Tito Mboweni told Parliament’s committees on finance last week that the government had to fill the gaps in the fiscus, as tax revenue had weakened.

“In this current situation, we expect revenue collection to come down probably by some 32percent or more, which means that we have less revenue, but greater pressures on the fiscus to spend,” Mboweni said.

Source: iol.co.za