South Africa should not approach the International Monetary Fund or World Bank for help, even as it grapples with the impact of the coronavirus outbreak, the governing African National Congress (ANC) party and two close allies said in a joint statement on Monday.
Finance Minister Tito Mboweni said last month that Africa’s most industrialized economy would only approach the IMF or World Bank for help fighting the coronavirus “if we run out of finance for health interventions”.
“The Secretariat is very concerned by the suggestions, conveyed through the Minister of Finance, that South Africa should approach the IMF (or the World Bank) for ‘assistance’. The suggestion is rejected,” the ANC and allies the South African Communist Party and Cosatu trade union federation said, referring to the secretariat of their “ruling alliance”.
“Instead, the Secretariat reaffirms the need to safeguard South Africa’s democratic national sovereignty, the fundamental right to self-determination, our independence, which are non-negotiable, even in the midst of a crisis,” the statement read.
Asking multilateral institutions, especially the IMF, for cash is deeply unpopular with a radical faction in the ANC and trade unions the party uses to rally support ahead of elections, partly because of the stringent conditions that can accompany IMF lending programmes.
But the country’s public finances are severely stretched after a decade under former President Jacob Zuma during which government debt rose steeply and economic growth ground to a halt.
Ratings agencies Moody’s and Fitch both downgraded the country’s sovereign credit ratings in recent weeks, citing fiscal pressures and a weak growth outlook.
Deputy Finance Minister David Masondo told local television station eNCA at the weekend that the government was talking to the BRICS countries’ New Development Bank about a $1 billion loan that could support the fight against the coronavirus and aid in structural reforms.
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