IMF loan welcomed by ANC

2012-06-20 14:05

Johannesburg - The ANC has welcomed the $2bn (about R16.4bn) loan by the South African government to the International Monetary Fund (IMF) to prevent a global crisis threatening the world economy.

"We believe that South Africa, as a member of both the United Nations and the G20, has an obligation to join hands with the rest of the world in averting a repeat of the last global economic meltdown," ANC spokesperson Jackson Mthembu said in a statement on Wednesday.

"Our contribution, together with the rest of the world's countries, will enable the IMF to intervene decisively, using the crisis fund that has been established, to the imminent threat to the world economy."

Earlier, the presidency said the commitment to the IMF firewall was not a gift, but a sound financial investment.

"If the IMF uses the funds, the money is lent to the IMF and not a gift... (and) for all of this time the money will be earning interest for South Africa," President Jacob Zuma's spokesman Mac Maharaj said.

"The capital of the loan will ultimately be repaid to South Africa. It's like lending money to a very strong bank. This is not a risky loan."

Zuma committed some of South Africa's reserves at the G20 summit, a meeting of the world's greatest economies, in Los Cabos, Mexico on Monday.

At least $430bn (about R3.5 trillion) had been set aside to stave off the risk of another financial crisis, which would likely lead to a sharp decrease in global growth and rising unemployment.

IMF members could access the funds through a temporary loan, with conditions, and the reserves were not earmarked for any region.

While the news was welcomed by Business Unity SA as an important step in maintaining stable economic growth, the Congress of SA Trade Unions felt South Africa should be a beneficiary rather than a contributor.

"The decision must be reversed and the $2bn used to alleviate the plight of the poorest South Africans and to invest in the restructuring of our economy," spokesperson Patrick Craven said.

Maharaj reiterated that the funds were part of foreign reserves, and did not require an additional budgetary allocation, and were critical in keeping the rand stable.

The wealth of a country was not necessarily an indicator for how much should be set aside for the IMF, he said.

China had a lower per capita income than South African and yet, had set aside $43bn (about R352bn).

India was "considerably poorer" and was allocating $10bn (about R82bn).

"Like China and India, South Africa is a responsible global citizen. We are in the G20 to support global stabilisation and growth. We need to continue to do our duty," said Maharaj.

The Federation of Unions of SA said it supported the government's commitment to play a more progressive and responsible role within the IMF.

It said the money would counter financial market tensions and fiscal imbalances, which had a major impact on growth, employment creation and confidence.

"We are of the firm view that as long as the global economy remains vulnerable, there would be a negative impact on the lives of people across the world," general secretary Dennis George said in a statement.

"The issues of economic growth, employment creation, development and confidence are interconnected and inseparable and must be tackled holistically."

George said leadership of this nature was required in a time of crisis to deal with economic uncertainty.

"We are supportive of the explanation of President Zuma that resources will be made available for the whole membership of the IMF and not earmarked for any particular region."

  • - 2012-06-20 14:22

    I wonder which members of the ANC are benefiting financially from this in some way.

      freddy.vanwijk - 2012-06-20 18:45

      You don't need a degree to work it out. Name anyone and you will be 100% correct. Exam writing on this is a waste of time.

  • Christopher - 2012-06-20 14:30

    We have 16 Billion rand to lend? What about our economy?

      Christopher - 2012-06-20 14:33

      Its Fu**en amazing they can find money when they say to South Africans we cannot afford housing, hospitals, school, school books...WTF!!! put that R16 billion rand into the econmoy of South Africa!!! A** HOLES!!! May you all die in hell!!

      freddy.vanwijk - 2012-06-20 23:36

      Correct question. Answer: There are more questions than answers. The economists know less than what the consumers realy know. Why? because they know alot less than you & me. Dawie Roodt and other economists, I'm watching you. Just keep it real. Escpecially on "Ontbytsake".

  • eyesears.handsfeet - 2012-06-20 14:35

    Once again just "giving" money away. It could have been used in SA. Sick sick sick anc government!!!

  • ndumiso.gagayi - 2012-06-20 15:22

    There are still places in this country wth no schools n goverment had to b given a court order to supply textbooks,there r still places with no running water. Zuma administration has lost the plot again and its not suprising.

  • Trent Hodges - 2012-06-20 15:39

    Seriously out of touch

  • fourie.joubert - 2012-06-20 16:04

    Do you idiots read and research? SA has over 20 billion dollars in foreign reserves which is where this came from. Yet none of you muppets shout for us to tap in to our foreign reserves to better the country...why not? because its THERE FOR A REASON!

  • Lerato - 2012-06-20 16:45

    @fourie.joubert I couldn’t have said it any better please people read and understand the concept before you bleat. To put this into perspective, this $2 billion will be taken from SA's foreign reserves. It will not be taken from SA' budget as some people are saying. Reserves are not part of Govt spending programme. Secondly, technically speaking, this money to IMF still belongs to SA, which is why SA will still earn interest on it. It is like lending money to IMF, not "donating" as some have been saying.

      ndumiso.gagayi - 2012-06-20 18:04

      If it blongs to SA then can it please be used to benefit the poor South Africans

  • aldridge.roman - 2012-06-20 17:11

    Mr Mthembu, ja as long as our ordinary tax payers money can be used by the useless ANC Cadres while our people are struggling with no houses, water, electricity and the endless service delivery protest, they can do whatever they want with our money, We need another party to take us forward after 2014, hope the people will vote with their head instead of the heart

  • lwazi.sibiya.10 - 2012-06-20 17:16

    They are really trying to be \good boys\ for the f**k ups of the west mxm

  • peter.mokoena.31 - 2012-06-20 18:28

    Charity starts at home from any sensible human being. Taxpayers are milked every cents, consumers are about to be e-tolled, elecectricity has sky rockected, very same masses represented are living in abject poverty and yet they can lend so much. Who is fooling who? Or is it a matter of let them eat cakes. Sickening!

  • bantu.jonginamba - 2012-06-20 18:40

    Craven are u of the view that SA and Africa for that metter must be the ones alwayz on the recieving end?Cant they be givers if an opportunity presents itself?And stop using other peoples plight.If u cared so much about the poor u will taking a portion of ur wealth to uplift the lives of those living in shacks u pass on ur way to ur lofty surburb.

  • bantu.jonginamba - 2012-06-20 18:40

    Craven are u of the view that SA and Africa for that metter must be the ones alwayz on the recieving end?Cant they be givers if an opportunity presents itself?And stop using other peoples plight.If u cared so much about the poor u will taking a portion of ur wealth to uplift the lives of those living in shacks u pass on ur way to ur lofty surburb.

  • marumobongani - 2012-06-20 20:03

    no complain

  • denny.cray - 2012-06-20 22:05

    A man pats himself on the back and loudly declares, "Well done!".

  • gladstone.dyonase - 2012-06-20 23:17

    16Billion? If we don't get a new party, DA is going to take over. And I won't blame anyone voting for it. As for me I don't need a Ballot, Never Again!

  • Johan De Beer - 2012-06-21 00:15

    Once again Cosatu misses the plot. Of course we need to contribute. A global financial meltdown would affect the poor even worse. As long as we don't later write off the loan again.

      Rational100 - 2012-06-21 07:40

      Good for u. Maybe when they default you will just sharpen your spears and run north to claim yo money back. Good luck with that!!

  • phelejoseph.lenonyane - 2012-06-21 05:16

    Lending money to a strong bank my foot!!! How can you lend someone money whereas your own family is battlying! I can't believe that Anc agreed to this nonsense given the crisis we are facing in SA! We have many unempoyed youth/graduates and that R16 b should have been used to give these umemployed people skills to boosts their changes of getting employment or starting their own business. If ANC under JZ is heading this way, then we have a very big problem, even worse than Zim one!

      Rational100 - 2012-06-21 07:45

      It happens every half a century...and it's called a Marshall plan!!.... Everyone thinks Europe must be saved buy a pile of money and if it doesn't work we try again. Lord have mercy on our stupidity!!

  • sizwe.bwana - 2012-06-21 06:31

    We have a beggar at every traffic light and we prefer to help with the greek bailout. ANC genius, must be a Malema idea

  • Rational100 - 2012-06-21 07:37

    It has been explained time and time again that Europes problem is that the northern countries have become more competitive than the southern countries of Europe ever since the EUro was conceived. Clearly therefore unless there is a structural programme in place to reverse this, Europe as a monetary zone is doomed and anyone pouring money onto it is doing so onto a bottomless pit. This kind gesture by SA via the BRICS is too shallow and ill-conceived. The Euro zone is definitely imploding no matter who says what including the IMF. The question is no more how but when!!

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