Finance Minister Tito Mboweni. PHOTO: GCIS

THE New Development Bank of the BRICS group of nations has approved a $1 billion loan to the South African government to support an economic recovery from the COVID-19 pandemic, the bank said on Thursday.

“The loan will support the Government of South Africa in its efforts to contain the economic fallout of the pandemic and start economic recovery,” the bank said in a statement.

The bank further said that the Loan will finance creation of employment opportunities in South Africa, in particular the first phase of the Presidential Employment Stimulus (PES) aimed to create and support about 700,000 job opportunities in the public sector, together with social protection measures for active labour market participants that temporarily lost their jobs, in order to help them remain in the labour market.

“NDB’s financing under the Program is primarily aligned with Sustainable Development Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all,” said the bank.

“The Loan is part of the second batch of COVID-19 Emergency Program Loans to NDB’s member countries focusing on economic recovery. The Loan focuses on supporting economic growth through employment generation as well as support for labor force participation. This follows the first COVID-19 Emergency Program Loan to South Africa that provided emergency relief funding for supporting healthcare and providing social grants in the country.”

The bank established the Emergency Assistance Facility in April 2020, to provide up to USD 10 billion in crisis-related assistance to its member countries, including USD 5 billion for financing healthcare and social safety-related expenditures, as well as USD 5 billion for supporting economic recovery efforts.

In total, the NDB Board of Directors so far has approved nine COVID-19 related emergency assistance programs with a total amount of around USD 9 billion.

The bank was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

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