R350 million deal with Cuba is ‘good for South Africans’, says Dirco

The Department of International Relations (Dirco) has responded to allegations that it intended to donate a whopping R350 million to Cuba, following an expose of information in court papers obtained by civil rights organisation AfriForum.

Responding to parliamentary questions by the Democratic Alliance (DA) on the deal, Minister Naledi Pandor explained that the said R350 million was an Economic Assistance Package (EAP) signed in 2012 by the two states and had nothing to do with what is currently before the courts, (donation of humanitarian aid to the value of R50 million).

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“Funds under the EAP could also only be used to procure goods in the South African market, which is beneficial to the South African economy,” said Pandor.

According to the department the deal was signed back in February 2012 and consisted of three facilities as explained:

• Facility A of the Package (a grant of R40 million for the purchase of seeds);
• Facility B (a solidarity grant of R100 million for the purchase of goods in the South African market) which has been implemented and completed; and
• Facility C, which was a credit facility amounting in total to R210 million for the procurement of SA goods, split into two tranches as per the signed Agreement.

It said that the first tranche (Tranche A) of R70 million under Facility C was available immediately on entry into force of the Agreement; and the second tranche of R140 million became available after the repayment of the initial R70 million.

For the first tranche of R70 million, Cuba borrowed from South Africa only R63 million and the department said this loan was fully repaid with interest in June 2019, which enabled Cuba access to access the second tranche (Tranche B) of R140 million.

“The second tranche was then granted in 2021. The second tranche is payable bi-annually. The first instalment date was 31 December 2021 and the last instalment is due on 30 June 2026.

“The EPA expired on 17 July 2021, but in terms of Article 11 of the Agreement, the Agreement will remain in force until all obligations of the Parties have been fulfilled.

“Therefore as far as the repayment of the money under Facility C is concerned, the Agreement will remain in force until the money is repaid by Cuba.”

AfriForum has since described the deal as not in accord with laws and described this as “completely irrational” under the conditions South Africa is currently facing.

“Our government borrows money from the IMF, but then sees it fit to donate much-needed funds to Cuba,” said Reiner Duvenage, Campaign Officer for strategy and content at AfriForum.

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 Back in March AfriForum successfully interdicted a R50 million donation to Cuba, as the High Court in Gauteng Division in Pretoria found that Cuba had not asked for funds, but humanitarian aid in the form of medical supplies and food.

Dirco has since appealed the interdict but suffered more humiliation as the same court rejected a leave to appeal application lodged by the department.

Duvenage questioned why government was so desperate to make the donation that it even moved to appeal an interim interdict, in a move he has since described as “bizarre”.