South Africa rules out IMF programme

South African Finance Minister Tito Mboweni ruled out an IMF adjustment programme on Tuesday and said the country didn't need budget support, despite acknowledging that there would be a deep recession this year because of the global COVID-19 pandemic.

Mboweni's comments came hours after the central bank unexpectedly cut its main lending rate by 100 basis points to 4.25% and predicted a 6.1% contraction in gross domestic product (GDP) this year.

Africa's most industrialised nation was already in recession before it recorded its first case of the new coronavirus in March. Investors are anxious about how it will fund a budget deficit many analysts expect to exceed 10% of GDP this year.

The country has the most confirmed coronavirus cases in sub-Saharan Africa, at 2,415, and that number is expected to rise significantly as more tests are conducted in far-flung rural areas and overcrowded informal settlements.

Addressing reporters on a conference call, Mboweni gave few clues as to how the government would raise additional funding, saying only that it was "open-minded" about approaching all international financial institutions.

On the possibility of loans from the International Monetary Fund, he said: "We are not looking for budget support. We would be looking for the COVID-19-specific packages that we can access.

"We are looking at programmes which would not be accompanied by any structural adjustment programme," he said. "We know what to do, we know what our structural reform programme is."