On April 2, 2021, the Board of Directors of the New Development Bank (NDB) approved a USD 1 billion COVID-19 Emergency Program Loan to the Government of the Republic of South Africa for supporting South Africa’s economic recovery from COVID-19 (the Loan).
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 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 labor market participants that temporarily lost their jobs, in order to help them remain in the labor 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.
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.
Background Information
The NDB 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 NDB 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.