Home South African DA writes to IMF over SAA bailout

DA writes to IMF over SAA bailout

240
SHARE

Opposition party has written to the International Monetary Fund to draw its attention to the government’s decision to proceed with a further R10.5 billion bailout for South African Airways

File picture: Simphiwe Mbokazi / African News Agency

THE DA has written to the International Monetary Fund (IMF) asking it to request the South African government to provide an update on how the $4.3 billion emergency funding loan recently provided to South Africa has been spent.

The DA has written to IMFexecutive director Kristalina Georgieva to draw the fund’s attention to the government’s decision to proceed with a further R10.5 billion bailout for South African Airways (SAA), DA spokesperson on finance Geordin Hill-Lewis said in a statement on Sunday.

This decision was contrary to the commitments the government made in its letter of intent (LOI) sent to the fund to secure the $4.3 billion loan.

“We request that the fund trigger its funding requirement for ‘full transparency and accountability’ on the rapid financing instrument (RFI) loan it extended to South Africa,” he said.

The DA has brought to the fund’s attention Finance Minister Tito Mboweni’s intentions to “extend this immoral bailout to the country’s mothballed national carrier” and had asked the IMF to request the South African government to give an update on how emergency funds had been spent.

The party said that the minister’s LOI clearly stated that emergency funding from the IMF would be used to support health and front-line services, solve the balance of payments problems caused by the pandemic, protect the vulnerable, support economic reform, drive job creation, and stabilise public debt.

Now it seemed likely that the SAA bailout would be funded by cutting Covid-19 stimulus expenditure earmarked for public employment programmes and for rail infrastructure, the DA said.

It argued that this was a deviation from the commitments Mboweni made in the LOI, and it “critically undermines the credibility of the government’s economic reform promises”.

“Seeing that the minister now clearly intends to dishonour his commitments with this SAA bailout, the DA believes that the IMF should trigger the accountability requirement for the RFI funding instrument without delay,” Hill-Lewis said.

– African News Agency (ANA)