South Africa will receive a loan of $750 million from the World Bank to protect the poor and support economic recovery from the COVID-19 pandemic, the National Treasury said on Friday.

The continent's second largest economy, South Africa has been hit hard by four waves of infection that killed close to 94,000 people and infected 3.5 million in Africa's worst caseload.

Successive lockdowns meant to protect people have led to the closure of thousands of businesses, swelling an army of unemployed as South Africa's jobless rate hit records in 2021.

"The World Bank budget support is coming at a critical time for us," Dondo Mogajane, the director-general of the National Treasury, said in a statement.

Funds from the development policy loan would help bridge a financing gap stemming from additional spending on the COVID-19 crisis, he added.

The World Bank in Jan. 12 warned that high debt levels, growing income inequality and coronavirus variants threatened the recovery in developing economies.

The forecasts for 2021 and 2022 – the first by a major international institution – were 0.2 percentage points lower than in the bank's June Global Economic Prospects report, and could be knocked even lower if omicron variant persists.

The International Monetary Fund (IMF) is also expected to cut its growth forecasts in its update on Jan. 25.

The bank's latest semiannual forecast cited a big rebound in economic activity in advanced and developing economies in 2021 after contractions in 2020 but warned that longer-lasting inflation, ongoing supply chain and labor force issues, and new coronavirus variants were likely to dampen growth worldwide.

Developing countries are facing severe long-term problems related to lower vaccination rates, global macro policies and the debt burden, according to the World Bank President David Malpass, who also cited troubling reversals in poverty, nutrition and health data and permanent impacts from school closures.