Mashaba claims SA debt will skyrocket with more loans from IMF, World Bank

The People’s Dialogue leader, Herman Mashaba, claimed that South Africa’s debt will skyrocket with more loan funding being called for to help the country’s economy ahead of President Cyril Ramaphosa address on Thursday evening.

Mashaba welcomed Tuesday night’s address after he issued a variety of measures in place to mitigate the “looming economic and humanitarian crisis”.

“These measures are long overdue as thousands of small business face closure, and millions of South Africans find themselves on the brink of starvation as a result of Covid-19,” he said in a statement.

Mashaba said the R370 billion needed in loan funding from the International Monetary Fund (IMF), World Bank and Brics Bank to help curb the pandemic would continue to increase.

“Our already high cost of servicing debt, which was exacerbated by our junk status as a result of ANC mismanagement, will skyrocket further.

“These costs will be borne on the people of South Africa. Urgent clarity is needed on which agreements have been signed, if any, and how these loans will be structured.

“With R130 billion coming from the reprioritisation of the current budget, the president must clarify where funds are being shifted from. The tabling of a new budget is essential to ensure the required level of monitoring and oversight, prevent corruption, and safeguard service delivery.”

He said there was no way that Ramaphosa could fulfil the requirements of economic reform likely to be required by the IMF and World Bank, as well as satisfy the demands of the tripartite alliance.

“It was only two weeks ago that a letter was authored by Ace Magashule, [the] Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) condemning the minister of finance for exploring finance from the World Bank and IMF.

“The president must clarify what concrete steps he will lead to ensure that South Africa can be freed from the policy disasters of the last ten years,” said Mashaba.

Mashaba further asked for clarity on how the government was ensuring that humanitarian relief was allocated fairly, and reaching the correct recipients.

“How will the Covid-19 grant be administered, given the chronic lack of capacity in the Unemployment Insurance Fund and South African Social Security Agency?” he said.

Also commenting on corruption prevention, Mashaba said: “The president reiterated his commitment to root out corruption, but actions speak louder than words. What measures are being put in place, such as the establishment of an independent oversight panel to monitor spending, to prevent corruption? With R20 billion in relief going to municipalities, this is of great concern.”

The People’s Dialogue leader said the easing of lockdown regulations was of greatest importance for businesses in the country.

“Businesses need to be put into a position of clarity so that they can begin planning to return to work, while taking the necessary preventative measures to ensure the safety of their personnel and customers.”

Mashaba added that Ramaphosa’s nation address was a step in the right direction, but “short of the detail required to ease the concerns of millions of South Africans”.

“It cannot be ignored that several questions have emerged that need to be answered as a matter of urgency.

“In a time of great uncertainty, the president has a responsibility to confide in the people of South Africa and be open and transparent about the actions of government tonight,” he concluded.

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