Tripartite alliance rejects Mboweni’s IMF, World Bank plan

The ANC-led tripartite alliance has rejected Finance Minister Tito Mboweni’s plan to turn to the World Bank and the International Monetary Fund (IMF) to seek financial help to stem an economic meltdown and fight the Covid-19 pandemic.

The Alliance Secretariat resolved that, instead, South Africa should approach the Brics Development Bank, because appealing to the World Bank and the IMF would compromise South Africa’s sovereignty.

The rejection of Mboweni’s plan could rekindle a call for the nationalisation of the Reserve Bank and give President Cyril Ramaphosa’s detractors in the Radical Economic Transformation camp ammunition against him.

Last week, Mboweni hinted that the country might approach the World Bank and IMF for help. This was soon after Moody’s ratings agency downgraded South Africa to a below investment or junk status rating.

“This morning, in a conversation with the Reserve Bank and the Treasury, I indicated that we should speak to the IMF and the World Bank about any facility that we can access for health purposes,” Mboweni said last week.

He also said that South Africa should take advantage of those facilities to relieve pressure on the fiscus.

The secretariat thought otherwise.

A secretariat statement said: “The suggestion is rejected.

“Instead, the secretariat reaffirms the need to safeguard South Africa’s democratic national sovereignty, the fundamental right to self-determination, our independence – which are non-negotiable, even in a crisis.

“Our struggle for liberation and social emancipation fought for the achievement of these rights and their strict protection.”

The ANC’s leftist partners want the Reserve Bank to play a “vigorous developmental role towards the turnaround of the economy”.

“The Reserve Bank can fulfil this mandate directly and indirectly in collaboration with public development finance institutions in consultation with the National Treasury,” the Alliance’s statement read.

It added that the government should explore all sources of domestic finance, including industrial retirement funds, as well as policy instruments to tap into resources to turn South Africa around.

Government should also explore approaching the New Development Bank established by Brics (Brazil, Russia, India, China and SA) and strengthen bilateral co-operation and mutually beneficial assistance with China and Russia in finance, industry, science and technology, as well as for the supplies needed in the war against Covid-19.

“Any terms involved in such cooperation and assistance must be clearly understood, negotiated and consulted on with social partners, and none should undermine democratic national sovereignty,” the Alliance said.

– ericn@citizen.co.za

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