Political parties have reacted differently to the International Monetary Fund’s (IMF) multi-billion rand loan to South Africa.  The Executive Board of the IMF has approved the country’s request for a R70 billion loan to help bolster its response to the economic impact of the COVID-19 pandemic.

However, with rampant corruption in the country, some parties are skeptical the money will reach and meet its intended purpose.  The R70 billion loan from the IMF is part of the government’s R500 billion stimulus package to support the economy.

This is the IMF’s first loan ever post-apartheid South Africa. It may be a stark reminder that not all is well in the country as the loan comes at a time when there are allegations of corruption and theft of the COVID-19 funds.

Congress of the People (Cope) spokesperson Dennis Bloem is concerned about possible embezzlement. ”There is no guarantee that the loan money from the IMF will not be stolen like the COVID-19 disaster funds. President Cyril Ramaphosa has lost control over the corruption fight. We have warned the ANC a long time ago that corruption will collapse the economy of this country, now we must go the IMF to borrow money.”

Accountability 

To ensure accountability, some parties have several proposals.

”For that reason, we as the DA are proposing that the Treasury implements extra-ordinary measures to be totally open and transparent about the use of COVID-19 Relief Funds and this loan. We propose that they should table every month a comprehensive report at Parliament on the disbursement and which companies are benefiting from these funds who are the directors of these companies and what the money is being spent on. We propose that Treasury should come to Parliament once a month and answer questions and face scrutiny about these reports,” says DA Shadow Minister on Finance Geordin Hill-Lewis.

SA’s sovereignty

Others fear the loan from the international lender will undermine the country’s economic independence.

‘‘This is the biggest political blunder in the history of South Africa. Loans from the IMF always come with neo-liberal and neo-colonial conditionalities and SA will not escape from this reality whether immediately or in the long run. The IMF will impose conditions that will certainly undermine South Africa’s macro-economic and fiscal policy sovereignty. Once again the EFF will be proven to be correct in this observation. It is now evident that the white capitalist establishment is working their global allies to use their puppet President Ramaphosa to hijack the sovereignty of South Africa,” says EFF’s spokesperson Vuyani Pambo.

The ruling party’s alliance partner, the South African Communist Party (SACP) Spokesperson Alex Mashilo says they are unhappy with the loan.

“We have had several meetings at the alliance level, to start with as the SACP we were not happy with the way the announcement of South Africa going to the IMF was made.”

“We did not know anything about it and we were worried about the IMF’s track record on the African continent as well as in Latin America. We did not want South Africa to take a loan that will take away our democratic national sovereignty. “

In the video below, Mashilo elaborates on their concerns:

‘Boost to COVID-19 fight’

Welcoming the loan, the governing African National Congress’ Pule Mabe says they will ensure the money is put to good use.

“We welcome the IMF loan and we are confident in that in welcoming the loan the national treasury said it shouldn’t undermine our sovereignty of our people. We also believe this loan will go a long way in bolstering efforts to fight and defeat the COVID-19 pandemic. It is also important that how these loans are utilised greater prudence is exercised.”

Two financial institutions, the New Development Bank and the African Development Bank have also pledged to help South Africa revive its falling economy.