The National Treasury says the R70 billion from the IMF will allow the government to provide relief where it is needed during the battle against coronavirus.
The remarks come amid concerns from various quarters about the loan’s impact on South Africa’s sovereignty and whether the money will do what it s intended to do.
In the video below, is a discussion on the loan:
South Africa has already secured two loans of around R16 and R5 billion from the New Development Bank and the African Development Bank respectively.
This is the first time that the country has sourced a loan from the IMF since it received one ahead of the 1994 elections.
Director General at National Treasury Dondo Mogajane says the money is meant to mitigate the social and economic impact of the of the COVID-19 pandemic.
“The first priority should be to ensure that we address the most vulnerable, which we are doing secondly we are ensuring that the impact of COVID-19 is contained and finally we use the remains of what is left to ensure that we create jobs and opportunities for the most vulnerable in our society, so I’d say those are the critical areas to ensure that we use the money appropriately at this point in time.”
Some economists have welcomed the IMF’s approval of the loan, while opposition parties have raised concerns about the financial assistance.
The Congress of the People (Cope) and the DA are concerned about possible embezzlement of the funds, while the Economic Freedom Fighters (EFF) has described the move to get the loan as ‘the biggest political blunder in the history of SA.’
Below, the SACP says it is worried about South Africa accumulating foreign debt:
According to the IMF, South Africa was able to secure the loan at very low-interest rates and has agreed to manage the funds with full transparency and accountability.