SA will be able to honour conditions of R70bn IMF loan - Treasury DG Mogajane
National Treasury on Tuesday said that the multi-billion rand loan from the International Monetary Fund (IMF) had not jeopardised South Africa’s sovereignty.
JOHANNESBURG – National Treasury on Tuesday said that the multi-billion rand loan from the International Monetary Fund (IMF) had not jeopardised South Africa’s sovereignty.
The IMF’s executive board on Monday approved South Africa’s request for a $4.3 billion loan, which translates to about R70 billion. The IMF said that the Rapid Financing Instrument (RFI) to the South African government would help the country address the severe economic impact of the COVID-19 pandemic.
In an interview with Radio 702, Treasury Director-General Dondo Mogajane insisted that the country would be able to honour the conditions attached to the deal. He said that the loan was negotiated carefully.
"We will certainly be able to live up to the expectations and the commitments that we made in getting this loan," Mogajane said. “I think it is important that South Africans should be comfortable that one, we did not put the country at risk and the sovereignty of the country is intact, which is what we have agreed with the IMF."
Mogajane said that the money would be well-spent by government.
“We will make sure that the money is spent accordingly and in line with the prescripts of the law,” he said.
Last week, the African Development Bank approved a R5 billion loan to the South African government to help fight COVID-19. In June, the New Development Bank (NDB) – formerly called the BRICS Development Bank - also approved a US$1 billion loan to SA to help the country fight the pandemic.
CONCERNS OVER LOOTING OF FUNDS
At the same time, South Africans have been calling for measures to safeguard the R70 billion loan to government to protect the fund from looting by those in power.
The Special Investigating Unit (SIU) is already probing the R500 billion COVID-19 relief fund, which has been flagged for several tender irregularities.
Corruption Watch’s executive director, David Lewis, said that the IMF loan should be welcomed but concerns needed to be addressed.
"The lack of action taking by the ANC to deal with corrupt people that gives me greater cause for concern," Lewis said.
The Organisation Undoing Tax Abuse (Outa) also called on government and the ANC to hold those found guilty of corruption to account.
"Very little has been done to hold people to account and it’s perhaps not getting any better," said Outa’s CEO Wayne Duvenage.
As civil society organisations raise concerns about the level of corruption during the coronavirus pandemic, the SIU is already investigating at least 90 companies in Gauteng alone for allegedly receiving irregular contracts from the Gauteng Department of Health.
Political analysts are worried that the R70 billion IMF loan will become just another tender bonanza.
Political analyst Ralph Mathekga said that corruption involved in COVID-19 funds has raised many worrying issues.
"I wake up with a few million in my bank account, I did not invent anything, I'm not brilliant at anything, I just happen to be at the right place. What kind of society is this?"
Economist Lumkile Mondi said that the ANC's track record only reinforced the public's perception that the party was struggling to control its members and hold them accountable.
"South Africans have seen that since 1994, the ANC has gone on a looting spree with compelte disregard for the rest of the South African people."
In a statement, the EFF has rejected the IMF loan, calling it the biggest political blunder in the history of South Africa.