The South African finance minister’s emergency budget has laid bare the perilous economic situation the country finds itself in.
Tito Mboweni told MPs on Wednesday that the government would be borrowing about $7bn (£5.6bn) from multilateral lenders to support its response to the coronavirus pandemic.
The funds will help pay for the $30bn Covid-19 relief fund announced by President Cyril Ramaphosa in April.
This emergency budget aimed at helping the country navigate an escalating economic crisis, was the first time since the end of apartheid that the country’s budget has been revised in the middle of a financial year.
The country’s GDP is set to contract by 7.2% in 2020, the largest reduction in almost 100 years, and up to 1.8 million jobs could be lost this year.
The total national debt is projected to reach nearly 82% of GDP in 2020, and tax revenues will be more than $17bn below target.
Nearly three months of lockdown has hampered tax collection and economic activity has been severely restricted.
Tuesday’s unemployment figures showed that joblessness had risen to 30% and Mr Mboweni said the state would spend more than $5bn to create jobs.
He also said government-led infrastructure programmes would be crucial in navigating the crisis.