Minister of Finance Tito Mboweni arriving at Parliament today. Picture: African News Agency (ANA)
Minister of Finance Tito Mboweni arriving at Parliament today. Picture: African News Agency (ANA)

Mboweni concedes World Bank loan uncertain as talks drag on

By ANA Reporter Time of article published Oct 28, 2020

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Parliament – Finance Minister Tito Mboweni confirmed on Wednesday that South Africa's chances of securing a loan from the World Bank may have lessened, but says the National Treasury remains in talks with the institution.

He suggested that since the discussions were about a standard borrowing facility, the conditions might be more stringent that those associated with the loan extended in the context of the Covid-19 pandemic.

"If I understand it correctly, this is not a Covid-related loan and that is what complicates the issues," Mboweni told a media briefing following his Medium-Term Budget Policy Statement.

"Conversations are ongoing... In my view, the probability of success is probably less, but nevertheless we are pushing for success."

Without divulging any detail, the minister signalled that he was concerned about the position the World Bank had adopted.

“I am very concerned about some of the posture the World Bank is taking, but we are discussing it internally and we are going to refine our approach in conversation with the World Bank, so that we can have a positive outcome."

South Africa secured a US$3.4 billion low-interest loan from the International Monetary Fund in late July to help see the country through the Covid-19 crisis and expects a loan agreement with the World Bank to follow in August.

However, months later there have been reports that this is hanging in the balance.

International wire agencies have reported that the talks, which began in April, have been derailed by the World Bank's insistence that South Africa slashes its public wage bill and guarantees that it will not use the funds to prop up loss-making state-owned entities.

In the MTBPS, Mboweni made an in-year allocation of R10.5 billion (US$641 million) to South African Airways to fund the bitterly contested business rescue plan for the national carrier.

African News Agency (ANA)

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