1 minute read
29 Jul 2020
5:01 am

Negative side of IMF loan to SA


It is critically important that this borrowing does not become a habit and we join the list of African countries with outstretched begging bowls.

IMF Managing Director Kristina Georgieva said the fund has received over 100 requests for aid from its members, and developing countries will need about $2.5 trillion to deal with the impacts of the coronavirus pandemic. AFP/File/Olivier DOULIERY

Going cap in hand to the International Monetary Fund (IMF) to bail out your country is nearly always a sign of government failure. Whichever way you look at it, the announcement that South Africa has secured a $4.3 billion (about R70 billion at current rates) loan from the global institution is not something to celebrate. The IMF is the “last chance saloon” for governments which have so mismanaged their finances that conventional banks run a mile before lending them money or do lend, but at punitive interest rates. That’s the situation in which our country finds itself … even before...