The IMF logo is seen through a flower bed in Washington, DC. Picture: ANDREW CABALLERO-REYNOLDS/AFP
“The IMF is used as a scare tactic to make the government aware that if we don’t implement the necessary policies, we may be forced to turn” to the fund Thabi Leoka, an independent economist, said in an e-mailed response to questions. “SA’s problems are not insurmountable. We know what we need to do. Our problem is the lack of implementation and political will.”
The possibility of IMF assistance “is in the headlines because people doubt the ability of the state to effect any economic reforms that are urgent and so required for us to deal with the structural problems,” said Lumkile Mondi, an economics lecturer at Wits University. “People have got no confidence, so they’re looking for a third party to help us implement a form of a structural-adjustment programme.
Ramaphosa convened a meeting of the President’s Co-ordinating Council on Tuesday to assess progress on the economic stimulus and recovery plan that was launched in September.Eskom has R440bn of debt and is battling to meet demand for electricity from ageing plants. The government’s plan to give it R128bn in assistance over three years will add to state liabilities and widen the fiscal shortfall. Fitch Ratings estimates the budget gap may climb to 6.