We were persuaded by President Cyril Ramaphosa's anti-graft stance: IMF

President Cyril Ramaphosa
President Cyril Ramaphosa

Assurance by President Cyril Ramaphosa that anti-corruption measures would be set up to deal with criminals eyeing the Covid-19 funds is what convinced the International Monetary Fund to give SA a R70-billion ($4.3.billion) Covid-19 emergency assistance loan.

Responding to SowetanLIVE queries, Montfort Mlachila, the IMF senior resident representative in SA, said that the lender had not “taken its eye off the ball of our governance and anti-corruption work” by approving the loan.

The loan, however, has sparked a public outcry that government leaders would misuse the funds, something that the IMF has noted.

"There will likely be increased temptation for corrupt activities and price-gouging,” Mlachila said.

"We support president Ramaphosa’s recent announcement to intensify anti-corruption actions. The government has put in place preventive measures to ensure that the procurement of supplies and services is transparent, competitive and cost-effective.

"It has also established a coordinating centre among law enforcement agencies to investigate corruption. Prosecution to the full extent of the law of those involved should be actively pursued and will hopefully act as a deterrent," he said.

Mlachila added that there were no specific conditions attached to the loan.

"The government’s commitment is to undertake economic reforms to boost growth and take fiscal policy measure to ensure that public debt remains sustainable."

He said SA had an excellent track record of servicing its public debt and the IMF didn't foresee any chance of the government defaulting on the loan.

"The probability of the government failing to service its debt to the IMF is exceedingly small. IMF debt service will peak at only 1% of the government’s revenue during the repayment period."

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