IMF and World Bank: Parties at odds over COVID-19 support

As South Africa navigates the economic fallout spurred by the coronavirus outbreak, the Economic Freedom Fighters (EFF), African National Congress (ANC) and Democratic Alliance (DA) are in disagreement over government’s decision to seek financial support.

President Cyril Ramaphosa announced in April 2020 that government would approach the International Monetary Fund(IMF) and the World Bank for help in raising R500 billion towards the country’s economic stimulus package, in the wake of COVID-19.

Government would have access to as much as $50m (R915m) from the World Bank and $4.2bn (over R70bn) from the IMF.

ANC NEC gives the green light for funding request

The ANC’s highest decision-making body, the National Executive Committee (NEC) is fully behind the move to seek out aid from the international financial bodies. This was one of the main take-aways from a virtual meeting held on Thursday, 7 May 2020.

The decision is “misinformed by incompetence”

The red berets, on the other hand, are lashing out at the ANC and Finance Minister Tito Mboweni, saying no options to protect the country’s economic sovereignty were put on the table.

“The IMF and World Bank, historically and presently, are not a wise economic option when we can explore other sustainable and economically beneficial ways in which we can finance public expenditure”, the party said in a statement on Sunday, 10 May 2020.

“The ANC and the Finance Minister Tito Mboweni are disingenuous to claim that there is a way to borrow money from the IMF and World Bank without jeopardising the integrity of domestic policy formulation and promotion of interests for all.”

The party further added that: “Initially, the Finance Minister misled the public, stating that the loan from the IMF does not have either conditions or interest. But the truth is that the IMF and World Bank are not in the business of charity and are instruments used to recolonise Africa.”

While the DA is not necessarily opposed to the move, the party has written a petition to IMF managing director Kristalina Georgieva, opposing the government’s use of COVID-19 disaster relief funds “in a racially discriminatory way.”

“As majority of these relief funds come from a loan obtained from the IMF, I implore this international body to censure the South African government and instruct it to stop using IMF monies in a way that discriminates along racial lines, and exacerbates racial tension in South Africa”, said DA leader John Steenhuisen.