The IMF has rejected DA leader John Steenhuisen’s bid to force the international lender to impose a condition that the South African government should not use broad-based black economic empowerment (B-BBEE) when allocating COVID-19 relief funding to distressed companies.
Sunday World can reveal the global lender, with 189 members including South Africa, did not accede to the DA’s demand that any funding from the IMF should “be conditional on its non-racial use”.
In May, Steenhuisen wrote to IMF MD Kristalina Georgieva, saying it is unconscionable for a government to deny any citizens assistance based on their race. “While funding made available by the IMF for COVID-19 relief does not carry the same conditions as regular IMF loans, I am sure you will agree that such emergency relief should be intended for all those affected by the crisis, and not just those of a certain race,” he said in the letter.
“There is a big difference between a government redress programme and emergency relief during a pandemic.” But Georgieva steered from talking about South Africa’s redress policies in her reply to Steenhuisen.
In the letter to the DA leader, dated July 24, she said it was important for the funds to be used to protect people’s lives and livelihoods, in particular those of the most affected and least prepared to weather the storm. She said the South African government had committed to transparently report spending of the funds, which will enable an assessment of the impact on mitigating the effects of the crisis.
“In the case of South Africa, as you know, the government announces spending details in the context of its budget reviews, and reports procurement on its dedicated publication portal,” she said.
“In fact, the authorities have committed to transparently plan, use, monitor, and report all COVID-19-related spending to ensure it reaches its targeted objectives. The execution of this spending will be published and audited. In line with the government’s policy and best practice, the related procurement contracts and allocation will also be published.”
This week, the IMF announced a loan of $4.3-billion (R73-billion) to help South Africa in its efforts to save lives and livelihoods in the face of the spread of the global Coronavirus pandemic – the conditions of which don’t include the DA’s demand for race not to be used in disbursing of the funds.
A week before Steenhuisen wrote to the IMF, Tourism Minister Mmamoloko Kubayi-Ngubane scored a major victory when the Pretoria high court ruled there was nothing objectionable and shameful about using race in the allocation of relief funding. The court said the response to the COVID-19 crisis had to recognise the uneven playing field created by apartheid between black and white people.
The departments of small business and tourism were targeted by lobby groups Solidarity and AfriForum for indicating that relief funding would be allocated to companies that are compliant with the country’s laws on B-BBEE.
This week, the Pretoria high court also dismissed the DA’s leave to appeal an earlier decision that the government was bound by the constitution to consider race, gender and disability in setting the criteria for eligibility for COVID-19 relief funding to companies.
