Mboweni brushes aside concerns over borrowing from IMF, World Bank

Finance minister Tito Mboweni said the public seemed to be over-emphasising the fact that SA will borrow money from international financing houses to fund socio-economic measures to address the Covid-19 crisis.

President Cyril Ramaphosa announced a R500bn injection on Tuesday. Mboweni spoke on Friday about how this amount will be raised.

He said there were different measures that will be used to raise the R500bn, the biggest of which was budget reprioritisation followed by the National Credit Guarantee Scheme, which could unlock R100bn to R200bn.

The scheme will help banks to continue providing relief to businesses under duress by providing loans on favourable terms.

This would allow the businesses, which generate R300m or less in turnover, to continue trading during this period.

“Finally, the issue that seems to be becoming top of the pops is whether you are going to approach the International Monetary Fund and the World Bank and those horrible people in Washington who carry with them stones which they use to break people's bones if you don't pay back and so on.

“I think to be honest, we are trying to make a mountain out of an anthill really.”

Mboweni said SA was a member of the IMF and the World Bank, it paid its subscriptions regularly and therefore the country was entitled to approach those institutions if necessary.

Mboweni said the IMF and the World Bank had put facilities in place to support countries that were being affected by the coronavirus.

He said the IMF had indicated that SA was entitled to apply for up to $4.2bn in response to the pandemic.

“Now of course [National Treasury] director-general Dongo [Mogajane] is in conversation all the time with the IMF and the World Bank people.

“At the World Bank, it seems for now we could negotiate a facility of up to $55m-$60m. Very small but we will negotiate as much as we can in this regard,” Mboweni said.

He said SA would approach the IMF for needs specific to the crisis.

“This is not the usual budget support policy intervention or technical assistance and conditionalities and things like that,” Mboweni said.

Mboweni said the New Development Bank (Brics Bank) had set aside $1bn which SA was entitled to apply for.

“Without doubt D-G Dongo will be following on from the request for funding that he has put across to the New Development Bank and we will follow up. We are members of that institution, we are entitled to apply,”  Mboweni said.