JOHANNESBURG (Reuters) – The African Development Bank (AfDB) has approved a roughly 5 billion rand ($300 million) loan to the South African government to help it fight the COVID-19 pandemic and support its budget, the bank said on Wednesday.

Africa’s most industrialised economy was in recession even before COVID-19 started ravaging its economy. Forecasts are now for gross domestic product to shrink by at least 7% this year, and a budget deficit of around 15% of GDP.

The country has recorded the most coronavirus infections in Africa, with more than 380,000 cases.

The AfDB said in a statement that the loan was to protect lives and promote access to essential medical equipment, to protect livelihoods by preserving jobs, and to support companies in the formal and informal economy.

“South Africa’s ability to respond to the pandemic has implications for neighbouring countries as well as the continent as a whole,” the bank said.

South Africa has also approached the International Monetary Fund for financial support in its fight against the coronavirus. The IMF is expected to consider its request next week.

The development bank of the BRICS group of nations approved a $1 billion COVID-19 loan for South Africa earlier this year.

($1 = 16.4914 rand)