South Africa’s 1.5 billion dollar development policy loan from the World Bank has been met with mixed reaction.
National Treasury said that the loan will help accelerate structural reforms needed to improve South Africa’s infrastructure and support faster, more inclusive economic growth.
Independent Economist, Azar Jammine welcomed the agreement saying borrowing from the World Bank is generally cheaper than raising money through commercial markets.
“These loans are substantial and come at a price that is significantly cheaper than where the government would try and
But Independent Economic and Energy Analyst, Tshepo Kgadima critiqued the move, saying the loan advances the government’s deficit financing, an economic policy where a government spends more money than it collects in revenue, covering the shortfall by borrowing.
“The fundamental mistake and belief is for this government to continue to engage in the failed policy of deficit financing which has been devastating. The overall capital markets have not responded in line with the rhetoric that we hear.”
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