A soldier stands guard as police members check vehicles at the start of a 21 day nationwide lockdown
PRETORIA, March 31 (NNN-AGENCIES) — South Africa has considered approaching the International Monetary Fund (IMF) and other institutions as a last resort for emergency funding to fight the coronavirus that has brought a national lockdown, the finance minister said.
“If we approach the IMF or the World Bank or the Development Bank, it would be only if we run out of finance for health interventions. That’s all,” Finance Minister Tito Mboweni said in a teleconference.
On the same call, central bank governor Lesetja Kganyago said there would be no need to impose capital controls to limit an anticipated heavy selloff of the rand and local bonds following Moody’s decision to downgrade the country’s credit to sub-investment.
Meanwhile, South Africa’s National Treasury said it was introducing a new tax subsidy of 500 rand ($28) per month for each worker to employers for the next four months to cushion financial losses suffered by firms due to the coronavirus.
In a statement, the treasury said it would also permit businesses with revenue of 50 million rand or less to delay paying 20% of their employees’ tax liabilities over the next four months.
“The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus,” the treasury said in a statement.
South Africa entered a 21-day lockdown on Friday with people restricted to their homes and most businesses shuttered. The country has reported over 1,180 cases of coronavirus and now faces a near certain deep recession.
The announcement also follows Friday’s decision by Moody’s to cut the country’s debt to subinvestment, meaning all three of the top ratings firms now rank the country at junk. — NNN-AGENCIES
