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IRR welcomes IMF call for improved governance by SA after granting R70.6bn loan

IRR welcomes IMF call for improved governance by SA after granting R70.6bn loan

The Institute of Race Relations has welcomed an unambiguous message by the International Monetary Fund in favour of “growth-enhancing structural reforms” in SA.

This followed IMF approval of a R70.6bn ($4.3bn) emergency loan to address the Covid-19 pandemic on Monday.

The think-tank said the IMF made clear in its statement on Monday what it expected of the South African government.

The IMF said there was “a pressing need to strengthen economic fundamentals and ensure debt sustainability by carrying out fiscal consolidation, improving governance and operations of [state-owned enterprises], and implementing other growth-enhancing structural reforms”.

The IRR said these key points echoed the thrust of the think-tank's communications over the past two months to alert prominent IMF donor nations to their critical role in efforts to overcome fundamental weaknesses in the SA economy.

It welcomed the implied repudiation by the IMF of growth-inhibiting policies, such as expropriation of property without compensation.

It said this was diametrically opposite to the implementation of growth-enhancing structural reforms the IMF was calling for.

“This is a significant moment for us as a country — a win for South Africans who have found their voice in demanding accountability from government,” IRR deputy head of policy research Hermann Pretorius said.

The IMF said in its statement on Monday evening that SA authorities had committed to manage its emergency financial assistance with full transparency and accountability.

Pretorius said this was by no means the end of efforts by the think-tank to ensure maximum accountability by the government.

Announcing the approval of the loan on Monday evening, the National Treasury said the loan would pave the way for the government to provide the necessary financial relief required to forge a new economy and mitigate further harm to the economy.

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