IMF COVID-19 loans have ‘zero interest rate, no conditionalities’ – Mboweni

Image credit: Twitter/South African Government

Finance Minister Tito Mboweni has said the International Monetary Fund’s (IMF) special facilities for COVID-19 have “zero interest rate and no conditionalities.”

Mboweni shared a video on Twitter on Wednesday showing the IMF’s Africa Director, Abebe Selassie, explaining the institution’s rapid-financing zero-interest loans.

He wrote, “Please listen to the clip below. Watch out for the words ‘zero interest rate and no conditionalities.’”

‘Not the time for division’

The Minister added, “After this, there should really be no doubtful questions. This is not the time for division. We should not lose any opportunity. It is a ‘war’ situation. ‘All to the Front!'”

In the video, Selassie said, “[South Africa] has now been hit with a crisis not of its own making … and as a result, its economy is being impacted.

“So, the facility that probably would be of most help to South Africa is the rapid disbursing resources that we have. There are no conditionalities associated with this facility, zero interest rates.

“South Africa, as a member of the IMF, is entitled to make use of this zero-interest payment, which I think is way more favourable than alternative financing.”

Opposition from ANC-SACP-COSATU secretariat

In his address to the nation on Tuesday evening, President Cyril Ramaphosa said the IMF is among the institutions South Africa has approached for funding of part of the government’s R500 billion economic and social relief package.

Some leaders in the African National Congress (ANC) and its alliance, which includes the SA Communist Party (SACP) and labour federation COSATU, had earlier opposed Mboweni’s suggestion of securing IMF and World Bank funding.

In a statement earlier this month, the ANC-SACP-COSATU alliance secretariat 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.”

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

However, a meeting of the ANC’s National Working Committee (NWC) on Monday mandated the government to do “whatever it takes” to rescue the economy.

The SA Reserve Bank estimates that the economy will contract by more than 6 percent in 2020 because of the five-week lockdown.

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