ANC, SACP, COSATU alliance cautions Mboweni against approaching IMF for bailout

Image credit: Twitter/South African Government

The African National Congress (ANC), SA Communist Party (SACP) and labour federation COSATU alliance has rejected Finance Minister Tito Mboweni’s “suggestions” that South Africa should approach the International Monetary Fund (IMF) for assistance if need be.

In a statement on Monday, the alliance’s secretariat said such a move would undermine South Africa’s sovereignty.

It said, “The suggestion is rejected. 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.”

‘Disciplined approach to communications’

The statement was signed by ANC Secretary General Ace Magashule, SACP First Deputy General Secretary Solly Mapaila, and COSATU General Secretary Bheki Ntshalintshali.

They were reacting to Mboweni’s recent interviews with City Press and Sunday Times, which reported him saying he could approach the IMF and the World Bank for COVID-19 response funding.

“This morning in a conversation with the 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,” Mboweni told Sunday Times on 29 March.

However, the alliance secretariat said Mboweni’s pronouncements “underscore the importance of a coherent and disciplined approach to communications during these difficult times.”

BRICS Bank

It urged the government to instead approach the BRICS New Development Bank (NDB) for assistance without undermining the country’s sovereignty.

“Government should evaluate and explore all sources of domestic finance including industrial retirement funds as well as policy instruments to tap into sources in a sustainable and mutually beneficial manner to turn round South Africa in the interest of all the people especially working class and poor,” the secretariat said.

The SA Reserve bank has forecast that South Africa’s economy may contract by 2.6% in 2020 as a result of the COVID-19 lockdown. Moody’s and Fitch credit rating agencies have also downgraded South Africa further while the unemployment rate is expected to rise.

The secretariat called on the Reserve Bank to play a more “developmental role” to help turn around the economy.

It also decided to establish an “Alliance Economic Task Force” that would make proposals on tackling the economic impact of COVID-19.

ANC Deputy Secretary General Jessie Duarte will chair the Task Force, which will also include the chairperson of ANC’s economic transformation sub-committee, Enoch Godongwana, and SACP Second Deputy General Secretary Chris Matlhako.

Mboweni has not immediately reacted to the secretariat’s statement. A Business Day report earlier on Monday said National Treasury will take up a $1 billion loan from the New Development Bank to help fight the COVID-19 pandemic.

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