The battle over where to source funds for South Africa’s economic stimulus package is raging at Luthuli House.
ANC Secretary General Ace Magashule is skeptical about government approaching the International Monetary Fund (IMF).
Magashule seems to be in agreement with Rwandan President Paul Kagame, who questioned African leaders’ tendency to ask international agencies for funding. But President Cyril Ramaphosa has already issued the directive and Finance Minister Tito Mboweni too is in support of seeking funding from the IMF.
In the video below, political and economic commentator Khaya Sithole discusses SA’s financial options:
Delivering an OR Tambo lecture this week, Magashule quoted Kagame.
“I would rather argue that we need to mobilise the right mindsets rather than more funding, after all in Africa we have everything we need in real terms. Whatever is lacking, we have the means to acquire and yet we remain mentally married to the idea that nothing can get moving without external finance. We are even begging for things we already have; that is absolutely a failure of mindset.”
The ANC Secretary General offered this advice to the government. “So whatever we do we can d
“So whatever we do we can go anywhere, we must ensure that there are no conditions which compromise the sovereignty of our country and government. The ANC and the alliance has agreed that we will never ever sell our national sovereignty and president Ramaphosa has emphasised it and we are happy that there is this one understanding that we must never sacrifice our national sovereignty . We must never have conditions of anybody that’s going to mortgage South Africa.”
ANC alliance partners, the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP) have endorsed the idea of approaching the IMF as a last resort.
In the video below, COSATU endorses President Ramaphosa’s decision to approach IMF, World Bank for COVID-19 loan:
Finance Minister Tito Mboweni has rejected as a myth, assertions that IMF and the World Bank are these big bad financial institutions.
“It’s whether you going to approach these horrible people of the IMF and World Bank in Washington, who carry with them stones which they use to break peoples bones if you pay back and so on. I think we are trying to make a mountain out of an end hill really. Fact of the matter is South Africa is a member of the IMF and the World Bank. We pay our subscriptions on a regular basis and we are entitled to approach those institutions if we so need. In this regard the IMF and the World Bank, have put facilities in place for countries that are affected by this coronavirus and we too are entitled to approach the IMF and the World Bank for funding. And the IMF has said South Africa can apply for $4.2 billion in response to this crisis.”
In the video below, Mboweni explains the rationale behind approaching the IMF and the World Bank: