The South African Communist Party (SACP) general secretary Blade Nzimande says they are unhappy with a government loan from the International Monetary Fund (IMF).
The International Monetary Fund (IMF) approved R70 billion loan to the South African government.
More than 70 countries have received financial assistance from the IMF to help in efforts to cushion the impact of the COVID-19 pandemic.
The SACP believes that the loan exposes the country’s economy to what it says is ‘imperialists interest’.
The loan will help mitigate the social and economic impact of the coronavirus pandemic.
SACP has described the move as a “grievous mistake”.
Its spokesperson Dr Alex Mashilo has warned that if the National Treasury continues with its ‘neoliberal structural programmes’ government and the communist party will meet in the streets.
Mashilo adds that government did not consult them
In the video below, SACP explains why they are unhappy with the IMF loan:
Jammine backs govt decision on IMF loan
Economist Azar Jammine has backed government’s decision to seek financial assistance from the International Monetary Fund (IMF) to mitigate the impact of the coronavirus pandemic.
Jammine says the country would otherwise need to borrow money from capital markets at higher interest rates of between 8% to 11%.
He says the IMF loan has the best possible offer with lower interest rates.
“The beauty about the IMF loan is that it gives us a little bit of a break on R70 billion out of the R775 billion that we have to borrow this year. In other words, for about 10 percent of our debt that we have to borrow, we [are] getting at 1.1%.”
“By going to the IMF and getting a loan at 1.1% per annum instead of 8-10% per annum, we will effectively be saving around [between] R8 [or] R9 billion of government spending every year. That would have otherwise had to go on servicing debt,” explains Jammine.
In the video below, is a discussion on the loan: