South Africa: Borrowing From the IMF Will Only Deepen South Africa's Crisis

(file photo).
opinion

If you take the devil in the boat, you have to row him to the shore, and the International Monetary Fund makes it clear that no one gets a loan from it without pursuing an economic policy that the IMF supports.

Finance Minister Tito Mboweni is creating panic before his tabling of the Supplementary Budget. He is speaking of an imminent "sovereign debt crisis".

By doing so he is pretending that the R1.8-R2-trillion state pension and unemployment insurance mega funds don't exist - half of them currently placed on the shaky stock market. He believes nothing can be done to halt the $10-25-billion in illicit capital outflows from South Africa every year.

Mboweni doesn't think a graduated wealth tax on the richest 1% of the population is possible or that the South African Reserve Bank (SARB) could "monetise" a part of the government debt to mitigate the exploding unemployment and widespread hunger - to cite just one of the measures suggested by 34 economists, scholars and others in an open letter to the SARB published earlier this month. The economists demanded a change in the whole macroeconomic framework to grapple with the Covid-19 crisis, warning that failure to do...

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