South Africa is on the verge of economic disaster stemming from the coronavirus despite attempts from the International Monetary Fund to stave off a nationwide depression.
On Tuesday, officials with the IMF said the South African economy is “subject to prominent downside risks” and is expected to shrink by 7.2% in 2020 because of a growing debt balance sheet and the dramatic downturn in business resulting from the coronavirus.
The IMF approved $4.3 billion in emergency funding to the nation on Monday, which will be used to “support the authorities’ efforts in addressing the challenging health situation and severe economic impact of the COVID-19 shock.”
The Washington-based lender said once authorities in the country contained the coronavirus, there would be a “pressing need to ensure debt sustainability and implement structural reforms to support the recovery and achieve sustainable and inclusive growth.”
Businesses in South Africa have struggled to remain solvent as tough restrictions on commerce and travel have been imposed by South African President Cyril Ramaphosa. In response, restaurants in the major industrial hub of Johannesburg, South Africa, have launched protests against measures that people say have threatened their livelihood.
