Opposition parties have come out in strong support of the EFF’s criticism of government’s loans from the IMF and the World Bank. 

Political parties including the DA, IFP and NFP slammed the government’s handling of loans as the country’s debt rose to more than R4-trillion.   

During an EFF-sponsored debate in the National Assembly on Thursday, EFF MP Omphile Maotwe argued the loans were nothing but ideological hogwash which compromised  SA’s sovereignty. 

She called for the loans to be returned.

“We want the money borrowed from the IMF and the World Bank returned to its racist, imperialist owners. We are not going to stand by and watch our sovereignty compromised even at a time when, globally, it is becoming clear that sovereignty of any nation is a strategic and security matter,” said Maotwe.   

Maotwe accused the National Treasury of colluding with Washington institutions and ratings agencies and in turn failing to perform its functions in the interests of workers. 

Given SA’s plummeting employment and  collapsing SOEs, there was nothing to show for what the loans had done, charged the EFF.

“The loans have nothing to do with economic growth or development of the country ...instead of collecting all these senseless loans, SA should enter into meaningful development partnerships with China. We must enter into partnerships that will build water, transport, sanitation, housing and education infrastructure,” said Maotwe.

While the DA agreed with the affect previous loans have had on the country’s battered economy, it differed with the stance that loans needed to be returned. However, it argued that they must be used efficiently.

“Reckless borrowing will not facilitate economic growth, not generate jobs, and will not fight unemployment and poverty ... no amount of borrowing can fix what the ANC has broken.

“The problem with SA debt is that it is not funding growth, it is funding current consumption expenditure — much of it fruitless and wasteful. This is reckless and irresponsible borrowing and we will default if we don’t implement necessary reform,” said the DA’s Dion George.

Like the EFF, the DA criticised the government's lack of transparency on the loans acquired.

“The minister needs to tell us if the money was received and what the government spent it on because there was no job creation, no economic reform and no debt stabilisation,” he added.

ANC MP Maidi Mabiletsa came to her party’s defence, arguing that SA’s debt and reliance on loans had been “extremely low” and that there was no evidence to support the  EFF’s claim on sovereignty.

“If our sovereignty is threatened, as the EFF says, how it is threatened? Show us evidence. The problem with the sponsors of the motion [is that] they again have chosen the wrong motion for debate because they have emotional fallacies instead of choosing a debate that looks at policy, governance, debt levels and non-marketable debt,” said Mabiletsa.

IFP MP Zandile Majozi cited financial discipline and lack of consequence management as being most problematic in terms of SA’s borrowing patterns. The party expressed concern at the country’s financial position.

“The IFP has very little confidence in the government’s ability to rebuild and salvage an already sinking ship ... We remain highly concerned about the massive loans received from global institutions such as the World Bank and the IMF.”  

Meanwhile, NFP MP Shaik Emam echoed the DA’s sentiments that taking loans was not a problem, but rather how the finances were handled.

“We are borrowing as a result of most of our money going to consumption and that is not acceptable. Can you imagine if your assets in this country were attached?” said Shaik. 

Deputy finance minister David Masondo recognised the sentiments of the frustrated parties, but attributed the recent loans to Covid-19.

“We fully agree that we cannot borrow just to finance failing SOEs, borrowing to finance consumption. But this [IMF] loan, we went out to borrow to deal with the revenue shortfalls as a result of the Covid-19 pandemic. 

“The lesson from this is that we do need to focus on growing our economy, undertaking those structural reforms, because, countries that were stronger, when Covid-19 hit, were in a much better position to absorb the shock and we were weak,” he said.

Masondo did not respond to calls for the loans to be taken back but moved to assure MPs that the country’s sovereignty had not been compromised in any way, at least for now.

“I think we do need to avoid going to the World Bank and the IMF and protect our sovereignty. We need work very, very carefully on our debt, at R4-trillion now. If we don’t keep it on a sustainable level, it is at that point that our sovereignty will be undermined,” he said.

He urged MPs to support finance minister Enoch Godongwana’s maiden budget because it sought to keep the country’s debt levels sustainable.

“Yes, borrowing particularly for consumption is not sustainable. The budget is trying for us not to keep our debt to unsustainable levels, because if we do so, we will be in trouble and that’s when we would have set the material conditions for us to go and lose our sovereignty. At the moment, this loan does not at all threaten our sovereignty,” he said.

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