ANC reported to IMF for ‘misusing $4.3bn loan to bailout SAA’

The DA has confirmed that they’ve contacted the International Monetary Fund to alert them to a possible case of misappropriation within the government. Geordin Hill-Lewis, the shadow finance minister, claims that the $4.3bn (R70bn) war chest borrowed from the IMF has been used to arrange a bailout for South African Airways (SAA).

Is the IMF loan paying for SAA’s bailout?

The airline, once again, is being dragged from the fire as it bids to fight another day. Last month, a guarantee was given to plough R10bn into the business, saving it from certain death. This decision has enraged the opposition, and left with few other alternatives, Hill-Lewis has gone for the nuclear option – they’ve grassed the government up:

“We’ve written to the Executive Director of the International Monetary Fund (IMF), Kristalina Georgieva, to draw the Fund’s attention to the government’s decision to proceed with a further R10.5 billion bailout for South African Airways (SAA) – It now seems likely that the SAA bailout will be funded by cutting COVID stimulus expenditure.”

“This decision runs counter to the commitments the government made in its Letter of Intent (LOI) sent to the Fund to secure the $4.3 billion loan. We request that the Fund trigger its funding requirement for ‘full transparency and accountability’ on the Rapid Financing Instrument (RFI) loan it extended to South Africa.”

“The Minister’s LOI clearly stated that emergency funding from the IMF would be used 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 [rather than go towards SAA].”

Geordin Hill-Lewis

ANC accused of ‘abusing’ pandemic loan

The DA went on to argue:

• Any use of IMF funds to save SAA ‘is a deviation’ from the commitments Minister Mboweni made in the LOI
• Such actions would ‘critically undermine’ the credibility of the government’s economic reform promises.
• The SAA bailout is a ‘clear intention to dishonour the agreement’ with the IMF.

We’ve contacted the ruling party to get their side of the story, and we await a response on Sunday. Although it’s yet to be confirmed if the IMF loan is supporting the airline’s bailout, Hill-Lewis is adamant the ANC’s spending has broken the terms of this agreement – which was signed during the height of the coronavirus pandemic in South Africa.

Seeing that the Minister now clearly intends to dishonour his commitments with this SAA bailout, the DA believes that the IMF should trigger the accountability requirement for the RFI funding instrument without delay. – @geordinhl

— Democratic Alliance (@Our_DA) October 4, 2020