South Africa’s resilience will help it see off virus, IMF says

South Africa is resilient enough to overcome the impact of coronavirus pandemic as long as its policies are recalibrated toward 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 rands, Abebe Aemro Selassie, the director of the lender’s African department, told reporters Wednesday.

“South Africa has always had very good international capital-market access” and isn’t in talks with the Washington-based institution about financing, Selassie said.

Finance Minister Tito Mboweni has touted the possibility of assistance from the fund for the first time to deal with the fallout from the virus, raising the ire of some senior officials in the ruling African National Congress and its alliance partners, who argue this would undermine the nation’s sovereignty.

The country would only seek virus-related packages from international finance institutions instead of budget support that would likely require a structural adjustment program, Mboweni told reporters Tuesday. The country is in talks with the World Bank for a $60 million dollar package, he said.

The New Development Bank, which serves the so-called BRICS countries — Brazil, Russia, India, China and South Africa — has also confirmed it’s in talks talks with the government for a loan of as much as $1 billion.

© 2020 Bloomberg