Economic Freedom Fighters statement on South African government’s intention to take loans from the IMF and World Bank

31 March 2020

The Economic Freedom Fighters rejects with contempt the South African government's expressed intention to take loans from the International Monetary Fund and World Bank as parts of the efforts to finance the battle against the Coronavirus outbreak. Responding to one of the newspapers, Tito Mboweni the Minister of Finance said, "This morning in a conversation with the (central) Reserve Bank and the Treasury I indicated that we should proceed and speak to the IMF and the World Bank about any facility that we can access for health purposes". In the same newspaper interview, the Minister further said, "We take no ideological position in approaching the IMF and World Bank. They are creating facilities for this environment and SA should also take advantage of those facilities in order to relieve pressure on the fiscus".

The EFF rejects Tito Mboweni's flirtations with the IMF and World Bank and strongly caution that such a move will worsen South Africa's socio-economic conditions. It is now undisputable that the involvement of the IMF and World Bank in different countries has led to massive reductions in social expenditure, particularly healthcare, education, social development, housing, and salaries of public servants. Inviting the IMF and World Bank to South Africa amidst economic crisis and stagnation which will be worsened by the Coronavirus outbreak will only serve to worsen the crises confronting South Africa today.

It is evident now that the economic policies pursued by Minister of Finance Tito Mboweni are the most right-wing, neo-liberal and decidedly dangerous policies to be ever adopted since the end of apartheid. Additional to flirtations with the IMF, Tito Mboweni's austerity budgeting and so-called structural reforms will only weaken the capacity of the State to lead a developmental trajectory that should necessarily develop South Africa's productive economic sectors, create jobs, defeat poverty and reduce inequalities.

What is sad is that the institutions that represent global capitalism such as Rating Agencies are still not impressed with the neo-liberal policies of Tito Mboweni, and this is illustrated by the downgrading of South Africa's Sovereign rating to junk status. So, despite South African government's attempts to please the global capitalist establishment, they are still not returning any favour through favourable ratings and investments to boost economic expansion, and the Coronavirus outbreak will make thigs worse.

The EFF rejects any attempts to take loans from the IMF and World Bank and instead demands that government should reprioritise all its expenses towards stabilisation of healthcare in South Africa. There are many unnecessary government expenses which should be refocused towards quality healthcare provision, and this includes bloated cabinet which must be cut by more than 50% and removal of all deputy ministers.

Government should not take advantage that we are all united in the fight against Coronavirus outbreak, and now begin to engage in catastrophic activities such as taking dangerous loans from the IMF and World Bank, which will certainly come with macro-economic conditionalities.

Issued by Vuyani Pambo, National Spokesperson, EFF, 31 March 2020