IFP slams World Bank loan, when R500 billion was ‘plundered’

The Inkatha Freedom Party (IFP) has slammed the government’s decision to accept a low-interest loan from the World Bank, given that R500 billion of Covid-19 funds was plundered.

The party said it is seriously concerned by National Treasury’s announcement that the World Bank has approved South Africa’s request for a $750 million (about R11.4 billion) loan.

National Treasury and the World Bank said that the purpose of the loan is to “support the government of South Africa’s efforts to accelerate its Covid-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery”.

The government cannot simply seek loans to cover funding gaps while the R500 billion in funds allocated to Covid-19 relief in 2020 was plundered,” said the IFP.

The Auditor-General had found that the fund had gone missing due to “fraud and resource leakage” because “controls, [and] procurement systems were weak.

The party says the loan comes at a time in which we (as a country) are merely trying to stay afloat.

“We run the risk of losing our sovereignty as a nation since we cannot service our current debt, while our national debt-to-GDP percentage stands at around 70%.”

The government currently spends most of its tax revenue on servicing debt.

“Government must not think that this loan is another opportunity to loot the state coffers, nor that it will close the debt gap we currently face. We are essentially widening the gap and digging ourselves further into a debt trap.”

The party said the news of a loan would not be bad if the country didn’t have a corruption endemic.

“Previous loan funds, financial aid and other grants have been stolen by corrupt officials within government.

“This, while ordinary South Africans anxiously await the tangible outcomes of such funds to improve their lives by lifting them out of poverty,” said the party.

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Compiled by Narissa Subramoney