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KZN premier calls for further debate before SA accepts money from IMF

'We must not lose sight of transforming the economy'

27 May 2020 - 21:02 By ZIMASA MATIWANE
KwaZulu-Natal premier Sihle Zikalala has warned that taking an IMF loan could threaten radical economic transformation in SA.
KwaZulu-Natal premier Sihle Zikalala has warned that taking an IMF loan could threaten radical economic transformation in SA.

ANC KwaZulu-Natal chair Sihle Zikalala has called for an open discussion before South Africa turns to the International Monetary Fund (IMF) to sustain its ailing economy as a result of the Covid-19 impact.

“The current argument is that the IMF is offering us a loan with no conditions, that it is at a reasonable rate and therefore we must go for that,” he said.

Zikalala acceded that the impact of the pandemic of the economy threatens to drag the country's economy deeper into recession. However, he remained adamant that other options should be explored before the IMF.

“We must also examine the point made by the tripartite alliance, especially the SACP, that we must go to international institutions [only] after exhausting all internal mechanisms such as the PIC and other funding within the country that may assist us, rather than rushing to these international bodies,” said Zikalala.

Primary to his concerns about an IMF loan was international interference in how South Africa's ability to govern itself could be compromised. 

The IMF is known [for] very serious conditions that have affected many countries and economies. The structural reform is imposed on many countries, many will be dictated on what policies must be implemented. The structural adjustment programme that comes with the IMF is something that we need to take seriously,” he said.

Zikalala warned that if SA’s ability to independently determine its own policy direction would be restricted. “If we agree to that, we must we must also accept that therefore radical economic transformation will remain a pipe dream,” he said.

“I am not saying we must totally reject the IMF loan, but we must debate these issues openly in society and compare with what other bodies are offering, [such as] the Brics Bank [and] African Development Bank.

“It cannot be that we are forced to yield and surrender our sovereignty to international organisations such as the IMF and they begin to determine what we must do. We must ensure that policy determination is not undermined at any time.

“We must not lose sight of transforming the economy. Ours now is about the second phase of the revolution, which should be characterised by radical economic transformation. We must not lose sight of that resolution.”

Zikalala also advocated for a “transformed” post-Covid economy: “Stimulate the economy but make sure that the economy is transformed. It would be useless if the next economy will be sustaining the status quo.

“We must look into how we build the economy of the country. Yes, we need to revive the economy, but at the centre of that should be transformation.”