ANC gives nod to IMF loan foray

● The ANC’s highest decision-making body between national conferences has endorsed the government’s decision to seek loans from the World Bank and the International Monetary Fund (IMF).

The national executive committee (NEC) of the ANC took a resolution on the issue during a virtual meeting on Thursday, when it discussed possible conditions the World Bank and the IMF may attach to loans to boost the government’s Covid-19 coffers.

Such loans were previously opposed by the other members of the ANC-led tripartite alliance, the SACP and Cosatu, which said they could compromise SA’s sovereignty.

The meeting also came out in support of tourism minister Mmaloko Kubayi-Ngubane in litigation over the use of broad-based BEE compliance as a prerequisite for companies seeking relief funding from her department.

Those who attended the digital meeting said NEC member and deputy finance minister David Masondo told it that the government would be able to access up to $50m (R915m) from the World Bank and $4.2bn from the IMF.

The World Bank’s provisional conditions include that the money should be strictly used for Covid-19 expenditure and must be repaid within 35 years.

The IMF’s conditions include allowing the South African Reserve Bank to manage the money flow and that the money be repaid within five years, without provision for a grace period.

ANC NEC sources, who spoke on condition of anonymity because discussions are confidential, said the conditions outlined by Masondo were regarded as a starting point for discussions between the government and the global finance institutions.

Another NEC member said that it does not make sense for the government to rule out assistance from these institutions given that SA has paid subscriptions to them amounting to billions of rands.

The NEC also resolved to back KubayiNgubane in her court battle with civil rights group AfriForum and trade union Solidarity.

The two organisations have taken her to the Constitutional Court after they lost a high court bid to compel the tourism department to stop imposing BBBEE compliance as a requirement for struggling companies in that sector to access government relief funds.

In a statement, the ANC NEC said the tourism move is “in the interest of advancing an inclusive economy”.

Commenting on the issue, KubayiNgubane said AfriForum and Solidarity had rushed to the courts without attempting to first discuss the matter. There had been “attacks directed at myself coming from many fronts”, she said.