Mboweni conceded that IMF loan could pay salaries of govt employees, says DA
'This sudden change by Mboweni from his avowed position of prudential public financial management to debt-fueled public spending is hardly surprising,' the party says.
Finance Minister Tito Mboweni has come under fire from the DA over his admission that part of the IMF loan could be used to pay salaries. Picture: Emmanuel Croset
Minister of Finance Tito Mboweni has said some of the loan received from the International Monetary Fund (IMF) could be used to pay the salaries of government employees.
This is according to the DA after the party submitted a parliamentary question relating to the R70 billion IMF loan granted to South Africa in July.
In a statement on Friday, DA MP Leon Schreiber said the party had asked the Minister whether any portion of the loan would be used to to pay the salaries of public servants after it was proposed the public wage bill would be cut in an attempt to trim the budget deficit.
Schreiber said it was not “surprising” after Mboweni reportedly conceded the loan receipts or disbursements would form part of the National Revenue Fund to be used to support existing government programmes, which could include salary payments.
“This sudden change by Mboweni from his avowed position of prudential public financial management to debt-fueled public spending is hardly surprising.”
Schreiber said the Minister would be abandoning his spending commitments if the IMF loan was used to pay salaries.
“By admitting that the IMF loan could be used to pay salaries, Mboweni has reneged on the spending commitments he made in his Letter of Intent to obtain financial support under the IMF’s emergency financing instrument.
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“The Letter of Intent committed the government to use IMF emergency assistance to support health and frontline services, solve the balance of payments problems caused by the pandemic, protect the vulnerable, support economic reform, drive job creation and stabilise public debt.
“As Mboweni gets ready to present the Medium Term Budget Policy Statement in a week’s time, his failure to hold the line and defend the public purse from marauding political interests in his own party will have far reaching consequences on South Africa’s long-term fiscal stability.
“The reality is that the country’s unprecedented high budget deficit and debt levels are only set to get worse as a result of an unending appetite for more debt.”
The MP added that the DA would write to the IMF in bid to object Mboweni’s intention to spend loan money on salaries.
“The DA has already written to the IMF to register our strong objection to Mboweni’s intention to spend another R10 billion on bailing out SAA.
“In our next correspondence with the IMF, we will similarly inform the fund that Mboweni has now decided to abuse the $4.3 billion loan to pay salary increases for ANC cadres.”
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