South Africa 'could get by without IMF loan': Economist

South Africa 'could get by without IMF loan': Economist

Local economist, Dawie Roodt says the International Monetary Fund loan of R70 billion to South Africa - is something the country doesn't need.

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"We actually could get by without this IMF loan simply because the Reserve Bank has sufficient Dollar reserved in order to pay for certain imports," he told Newswatch following Monday's announcement. 

Treasury says the money will be used to help the country mitigate the adverse social and economic impact of the COVID-19 pandemic. 

Roodt the loan comes with certain requirements.

"The condition for this money is that the state finances will be better run, the state of enterprises will be better run and so on. 

"I think from a political point of view, the biggest advantage of this IMF loan is the minister of finance can use this as a stick to make sure that his colleagues remain on a straighter arrow. 

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"Which means that they can use this as a reason to force his colleagues to spend less of our money because the state finances have become completely unsustainable."

He says there are other benefits.

"One is that we are getting some money at a cheaper interest that is one benefit and another benefit is that state spending is done well and support the demand in the economy and support the South African economy as well. The biggest benefit certainly is political."

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