Approaching IMF and World Bank is not an option, Mboweni told

The secretaries of the tripartite alliance have rejected finance minister Tito Mboweni’s suggestion to approach the International Monetary Fund (IMF) and the World Bank for funding to help fight coronavirus.

In a meeting that took place on Monday, the secretaries of the ANC, SA Communist Party and the Cosatu have all agreed that approaching the IMF and the World Bank was not an option.

Mboweni previously told the Sunday Times that he indicated, in a meeting with the SA Reserve Bank and Treasury, that they should approach the IMF and World Bank about accessing a funding facility “for health purposes”.

The alliance secretariat – ANC secretary-general Ace Magashule, SACP general secretary Solly Mapaila and Cosatu general secretary Bheki Ntshalintshali - said it was concerned about Mboweni’s suggestion which sought to place the country’s sovereignty under the dictate of the IMF and the World Bank.

Impact of coronavirus on the economy is already being felt as a lot of people have stopped going to work and sale of goods has also been affected, especially since the lockdown was implemented. Rating agency Moody’s also downgraded the country to a junk status.

“Instead, the secretariat reaffirms the need to safeguard South Africa’s democratic national sovereignty, the fundamental right to self-determination, our independence – which are non-negotiable, even in the midst of a crisis. Our struggle for liberation and social emancipation fought for the achievement of these rights and their strict protection in a democratic South Africa,” the alliance secretariat said.

They said instead facilities within the country such as retirement funds should be explored as well as approaching the BRICS’s New Development Bank.

“Government should evaluate and explore all sources of domestic finance, including industrial retirement funds, as well as policy instruments to tap into the resources in a mutually beneficial manner to turnaround South Africa – in the interest of all the people, especially the working class and poor, the overwhelming majority.  

“… consideration should be made to strengthen bi-lateral co-operation and mutually beneficial assistance with China and Russia in the areas of finance, industry, science and technology, as well as with regard to the supplies needed to win the war against Covid-19. Any terms involved in such co-operation and assistance must be clearly understood, negotiated and consulted on with social partners, and none should undermine our democratic national sovereignty.”

A team led by ANC deputy secretary-general Jessie Duarte has been tasked with coming up with proposals to respond to the economic impact of coronavirus.

They will also look into the proposals made by a group of over 100 academics in the economy sector in a letter to President Cyril Ramaphosa where they made suggestions on how to deal with the impact of Covid-19.

Among others, the academics proposed a special grant that would see the poor and lower income groups households receive R1,000 for over four months.