SA scraps Cuba's R1bn debt

2010-12-07 22:37

Johannesburg - A debt of R1.1bn owed by Cuba for diesel engines bought from South Africa during the 1990s was cancelled on Tuesday, the presidency said.

"It is not as if Cuba could not repay the debt. The problem is that it was becoming a hindrance to trade and economic development between two countries," Trade and Industry Minister Rob Davies said in a statement issued by the presidency.

"South African businesses demanded cash in advance because the Export Credit Insurance Corporation of the DTI could no longer insure Cuba's orders as it had exhausted its credit limit," he said.

Davies signed the agreement on Tuesday.

Minister of Home Affairs Nkosazana Dlamini-Zuma also signed an agreement on the waiver of visa requirements for holders of diplomatic, official and service passports. This would allow citizens with relevant travel documents to enter and remain in both countries for up to 90 days without visas.

These agreements came after President Jacob Zuma announced on Tuesday that a R210m credit line package for Cuba had been finalised, and was aimed at boosting economic ties.

"One aspect of the package is the extension of credit guarantees to Cuba, to the value of seventy million rand," Zuma said in a speech prepared for delivery at the SA-Cuba business forum in Havana.

"This facility from our government's Export Credit Insurance Corporation will insure South African suppliers for exports to Cuba. The modalities of this, including the products, coverage and other issues are being finalised at a technical level," he said.

Zuma additionally announced a R40m contribution towards Cuban agriculture for reconstructive efforts following a destructive hurricane in 2008.

"We will also make available R100m from our African Renaissance Fund for purchases from South Africa... These facilities will help us remedy a worrying situation as South African exports to Cuba had fallen from R82m rand in 2008 to only R1m this year, in 2010," he said.

South Africa offered promising investment opportunities in areas like automotive components, capital equipment, aerospace, chemicals, agro-processing and ICT, Zuma said.

"We would also like to bring to your attention our massive infrastructure development programme, on which South Africa will spend more than one hundred billion US dollars over the next three years. Cuban companies and skilled personnel can explore opportunities in this programme."

Zuma acknowledged the deployment of more than 400 Cuban professionals to the architecture, engineering, medical and technical industries in the country.

"Cuban doctors have for many years provided service to people in need," he said.

Outstanding hospitality

"Of significant importance is the training of our young people as medical professionals, through Cuba's generous offer of eighty scholarships each year."

Through this programme, more than five hundred young South Africans from impoverished communities had been given the opportunity to pursue a career in primary health care and provide a service to their communities."

Zuma praised bilateral programmes in place for health, labour, social development, housing and public infrastructure.

"We extend our gratitude to President Raul Castro Ruz for the outstanding hospitality extended to us, and also the discussions we have had which will take our relations forward."

  • sUE - 2010-12-08 09:23

    And we can afford the scrap such a huge debt? I'm astonished!

  • Bedreigde Spesie - 2010-12-08 09:42

    Write off R1 bn debt !! Only SA goverment !!! How many houses for the needy could have been built !! How many hospitals in SAthat do not even have disprins BECAUSE THERE IS NO MONEY !!! Doctor gets raped because there is NO MONEY OR SECURITY. But lets help the communists !

  • jay - 2010-12-08 09:47

    now the award to JZ makes sense

  • Good Relations - 2010-12-08 09:53

    I forgive the Cubans for taking up arms against us on the border. Heck, I'll even forgive them for their cowardly MIG attack on our retreating troops. But now my tax money has to cover their R1.1b debt to South Africa? Why don't we bring Fidel Castro & his Che-praising communist guerrillas to Tutu's beloved TRC commission & get them dancing about? To the Zuma bunch: In the spirit of encouraging further trade between myself & the SA economy, I request that you write off all my income tax for the rest of my life & pay for my house. This will encourage me to continue contributing to SA's economic growth. Thanks!

  • JR - 2010-12-08 09:56

    ANC and the Castros. Birds of a terrorist feather flock together.

  • James Martens - 2010-12-08 10:08

    Forgive Cuba R1 Billion debt, plus provide additional credit line of R 210 Million , to open up more business opportunities. It would be good for SA taxpayers to know the potential value of the latter so as to assess the wisdom of such a material write-off of taxpayers' money. Hopefully the Minister is asked this question at some point. And the answer cannot be that we will get more doctors trained. At the current "opportunity cost" of R 1 billion divided by 500 trained to date , this does seem a bit expensive and perhaps could be better spent extending SA's own local medical training facilities.

  • De Ville Smith - 2010-12-08 10:19

    No wonder Zuma gets the highest award, our hard earned cash paid for it.

  • JR - 2010-12-08 10:20

    How convenient, just a couple of days after JZ was awarded a top honour by CUBA! A coincidence??

  • Scobo - 2010-12-08 10:22

    Dear government, please review my debt as well, its only about 15K... It is not as if I could not repay the debt. The problem is that it is becoming a hindrance to eat and drink, and wealth development between the country and me,"

  • Testy - 2010-12-08 10:24

    This development is worrying on SO many levels....

  • YasButIDunno - 2010-12-08 10:46

    What, no comments? I guess everyone is speechless at yet another squandering of taxpayers' money. After all, I guess part of being King Zuma means showing your commie buddies in other countries that you can do whatever you feel like, no referenda required here.

  • anon - 2010-12-08 10:49

    I was wondering why jz won the "highest prize in Cuba" earlier this week....

  • Johan - 2010-12-08 10:50

    Give them more. After all we do not need any Agriculture assistance to our own farmers !!!

  • Supple - 2010-12-08 11:12

    If cuba could pay the debt...why shouldn't we let them pay it. If Cuba's expenditure has dried up to a paltry R1 million...then clearly there is no money to spend...What's going on?

  • Not Fooled - 2010-12-08 11:25

    Let's call it what it was. The writing off of a bad debt. Cuba was not able to pay its debt after 15 years. Why is South Africa strengthening ties with a country unable to pay its debts? Who would want to conduct business with a country unable to pay its debts? Does the R210 million credit guarantee mean that the SA taxpayer will pick up the tab for a further R210 million in debt yet to be incurred? Which South Africans will be the beneficiaries of the R210 million credit guarantees?

  • MA - 2010-12-08 11:44

    Gosh, such generosity toward another country. I wonder what the millions of homeless/jobless/starving South Africans have to say to this? Silly me, they don't have a voice. Or a choice. Government for the people. Which people?

  • ABIGWAR - 2010-12-08 11:45

    Hey, whats a billion between chronies. Interestingly 1 billion is the price of a top cuban award. I wonder when JZ is going to award himself five stars and become a genral....

  • KTM Mzansi - 2010-12-08 11:46

    The links with communists should be questioned. Is South Africa in support of communists. PLease, please I pray and hope that this country will be reformed and back biblical values. thank you

  • Mike - 2010-12-08 11:53

    One of the divisions of my business used to export SA products to eastern Europe / Russia in 2008 to the tune of about R20m/ year (and for the previous 5 years). In 2010 we exported R0.00 all due to the strong Rand! No other reason. It is just cheaper to get stuff from other countries. It doese not take an economics genius to work that out. Nore have we recieved a stimulus or compensation from our Government to rectify the problem and keep people employed. I am sure that the now unemployed will be greatful that our leader has given away their hard earned taxes that could have been utilised to subsidise their unemployment funding.

  • pop101 - 2010-12-08 11:54

    Ag nou ja.....

  • Colin - 2010-12-08 11:55

    I have nothing to add to the comments already expressed; but I would like to record that I am totally disgusted.

  • Realist - 2010-12-08 11:58

    Cuba helped the terrorists in the past now they are are paying back. Mandela has prasied them in the past. The interest alone is higher than the debt. The ANC Elite doesn't care about the poor black in this country so what is new?

  • Realist - 2010-12-08 12:01

    The ANC Elite are not writing off the debt they are re-allocating the funds to themselves. I wonder how many awards and holidays this will fund JZ and his motley crew. I smell GRAVY!

  • Botho - 2010-12-08 12:03

    'UBUNTU',HUMANITY that's what South Africa is all about, not GREED.

  • Bullet - 2010-12-08 12:05

    The extended credit will benefit some South African companies or individuals who will export goods to Cuba and get guaranteed payment from the SA produced credit line. I hope the identities of the South African exporters are made public so as to ensure the "guaranteed income" does not only benefit JZ and his buddies at the expense of all ordinary South Africans. I hope but do not hold my breath - this looks like another champion opportunity to mask corruption as a legitimate activity.

  • Nick - 2010-12-08 12:06

    @YasButIDunno It's not about no comments. Only certain ones gets placed. Seems like a touchy subject for some!

  • jacques Otto - 2010-12-08 12:08

    This is what happened. JZ said, look give me your top award. Instead of paying the R1b in debt to South Afirca you give Letuli house R50m and my family R50m. JZ then said we will take the anti communist that pay taxes money worth R210m to start trade again. We however will impose that no whites will be allowed to form part of this credit insurance. Only Lutuli house and its partners will be able to benefit. TIA

  • P Borchard - 2010-12-08 12:09

    Only in South Africa!!!! JZ, how stupid do you think we are - or put another way - what did you and your immediate family score out of this deal? If just a tiny portion of the billions written off was invested into training our own kids locally, the payoff (for the whole of S.A) would have been so much greater for a hell of a lot of years to come. But no, rather throw a lot of money THAT WE SUPPOSEDLY DID NOT HAVE to pay a decent salary to our teachers, police, army, etc. into that deep dark hole on the other side of the world - that makes perfect sense if you are in the ANC government. How about applying our credit act to vetting the feasibility of those "clients" S.A. allow debt?

  • listen up - 2010-12-08 12:19

    - @botho - ever heard the saying ; " charity starts at home " ? What about some UBUNTU for the poor and desparate people in SA ? You really have no bloody clue about the real world .

  • Steve - 2010-12-08 12:25

    Not a problem. Rather let Cuba keep the money. That way it will not get into the pockets of this corrupt ANC crowd. The dogs

  • Keith - 2010-12-08 12:37

    So MY tax money is now used to prop up a communist state that we were virtually at war with not so long ago. Very insensitive of Government. Take our taxes intended for the poor and give to the communists. This is wrong for so many reasons. Is it even legal? How much did certain government people get from Cuba for this write-off. Journalists need to investigate this one but oh no their investigation will be muzzled under the new press laws.

  • rick - 2010-12-08 13:08

    and JZ says that he thanks the Cuban president for the outstanding hospitality - idiot - for R1 billion he can afford to wine and dine you to the very very best. do we really need to do business with this country in the future or will we simply write off the dent again -after having more "outstanding hospitality" - makes you think?

  • Peter Scott - 2010-12-08 13:16

    @scobo well said and in the words of our "beloved " presdent "this is where the diffrens comes"

  • Jim - 2010-12-08 13:18

    What about scrapping my tax that I pay every month? Zuma has now decided to give our money away to the commies.

  • Jubster - 2010-12-08 13:23

    So when I travel our new roads and and ring up a debt with the new tolls . I would like it scrapped also can you help me out with my bond and car. I billion oh how many houses we could have built and how much infrastructure in rural areas we could have improved.

  • Horza - 2010-12-08 13:44

    "It is not as if Cuba could not repay the debt." Sure, that's why we waited 20 years. The interest must be monumental. I wonder who got the commission?

  • kevin - 2010-12-08 14:19

    and ....COSATU remains silent, what about the poor and the schools, the hospitals and sewage plants and... and.. and...Another clear indication that they (The ANC alliance) is taking us all for a ride..!!

  • Len - 2010-12-08 14:55

    Plus R1.2million for an Eskom party.

  • Anti ANC - 2010-12-08 15:57

    I do not really care how much JZ writes off. I would never vote for the ANC. Once a terrorist always a terrorist! Service delivery by the ANC is non existence for anyone except the ANC Elite as far as I am concerned. It is the poor black supporters of the ANC who need to care, it is their inheritance the ANC is squandering. ZUMA and his LEECHES will enjoy their ill gotten gains for as long as their supporters allow it. How long will that be? When the supporters get a lot poorer than they are now they might wake up. VOTE FOR ANYBODY BUT THE ANC TO GET SOMETHING FROM THE GOVERNMENT. A COALLITION WOULD BE BETTER THAN ONLY THE ANC.

  • Realist - 2010-12-08 16:03

    The ANC Elite live in the expensive areas where as their supporters live in the poor areas in tin shacks yet the ANC Elite have funded their Cuban Holidays for a few years at their expense. Makes you think!

  • Bob - 2010-12-08 16:18

    1.1bn thats a lot of engines. Perhaps Ratels were attached to the engines. 1990 was a long time ago but I seem to recall that Cuba and SA were not the best of friends at that time. Does not add up. This needs further investigation.

  • Somma Su - 2010-12-08 22:18

    It's morally and fiscally wrong for sure. In the little play pen of international politics it is right down stupid. Many countries are GIVING millions of rands for social upliftment to SA, these same countries for varous reasons are no friends of Castro. Surely we are offending them in a big way and we should not be surprised if they withdraw from the projects they are involved with.

  • TonyCT - 2010-12-09 08:53

    Jacob decided that he needed to model his behabviour on that of other great presidents who love woman and this year he wanted to behaviour like Bill Clinton but he did not want to pay for his cigars.Solution, write off Cuba's debt.

  • Nev - 2010-12-09 11:13

    The Gov lock up his own citizens for a few thousand tax money poeple begging in streets, no jobs but giving money to Cuba they will never get my vote again,

  • Paul - 2010-12-09 16:20

    Ons moet BID vir die ANC - Bring It Down!

  • Gavin - 2010-12-10 09:27

    The money collected by revenue and placed in the fiscus is the property of SA taxpayers and should be used exclusively for the benefit of all its citizens, but especially to upgrade the less advantantaged amongst us. It is not acceptable to me, and I suspect, the majority of my fellow SA citizens, for Mr Zumu to arbitrarily donate R1.1bn to a failed basket case. The R210 "stimulatory package" I feel adds insult to injury. I doubt if there will be any benefit for the ordinary man and woman in the sttreet. You can surmize that ANC well connected will get kickbacks. Robbing Peter to pay Paul will make Paul happy but anyone with a brain will realize that this type of thing is just not sustainable. We get ever closer to the tipping point and then all hell will break loose in this beautiful country. Zim II is closer than we think.

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