THEBE MABANGA
THE release of the Government’s Letter of Intent to the International Monetary Fund (IMF) to secure a $4.3 billion for COVID-19 relief will both allay fears that the loan comes with onerous conditions but will also raise questions about how exactly the loan will be repaid and what happens if promises to the IMF are not kept.
It seems government has promised the IMF austerity measures, however painful, just to repay its debt.
The letter, signed by Finance minister Tito Mboweni and Reserve Bank Governor Lesetja Kganyago, states simply: “On behalf of the Government of South Africa, we hereby request approval of financial support from the IMF under the Rapid Financing Instrument (RFI)…[for]… 100 percent of quota to mitigate the adverse economic impact of Covid-19.”
The concerns about conditions are addressed by the fact that under the RFI, a country merely has to demonstrate that it is
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