World Bank Loan Terms are 'Palatable' - South African Minister

Finance Minister Enoch Godongwana has said that a U.S.$720 million Policy Development Loan (DPL) from the World Bank came with favourable conditions. During the virtual meeting, Members of Parliament sought to establish whether the loan was warranted and what it would cost to service the facility. "Given its terms and conditions, which were palatable to us, compared to what is available in the market, we went for the World Bank loan," Godongwana said.

This DPL from the World Bank supports the implementation of South Africa's Economic Reconstruction and Recovery Plan. The funding is a low interest loan that contributes to the government's fiscal relief package while reinforcing South Africa's decisions on how best to provide relief to the economy and those worst affected by the current crisis, the government said in an earlier statement.

According to, Dennis Webster of New Frame, South Africa dipping its toes in the World Bank pool for the first time sends an important policy signal. Having so far escaped the original sin of being unable to borrow over the long term in its own currency, the country currently has low levels of dollar borrowing. But if its chronic fiscal position - it already spends more on debt repayments every year than on health - gets much worse, the potential for borrowing in dollars in the future is huge, Webster wrote.