Impact of IFI Loans on South Africa
As South Africa grapples with the implications of loans obtained from International Finance Institutions (IFIs), it is crucial to assess their effects on our nation’s economic stability and, most significantly, on the daily lives of our citizens. The aim of this submission to Parliament is to shed light on the potential risks associated with IFI loans and present recommendations for a more prudent approach to securing external financing.
Understanding the Impact of IFI Loans
IFI loans, notably from bodies such as the World Bank and the International Monetary Fund (IMF), have the potential to profoundly shape the economic landscape of South Africa. The recent loans procured, amounting to R141 billion, while seemingly a fraction of the country’s economy, raise concerns due to their impact on debt sustainability and the imposition of policy conditionalities.
The looming threat of austerity measures, privatisation, and weakened state institutions in crucial sectors like education and healthcare highlights the urgency of this matter. The potential deepening of poverty, reduced job opportunities, and increased inequality demand immediate attention and proactive measures.
Policy Imperatives: Demanding Oversight and Reform
This submission insists on the necessity for stringent oversight and reform in the procurement of IFI loans. The conditionalities attached to recent loans, their delayed disbursements, and implications beyond immediate pandemic response underscore the need for parliamentary involvement in such decisions. Transparent processes and clear consultations should precede the signing of any loan agreement.
Long-term Impact Assessment for Debt Sustainability and Human Rights Obligations
Central to this submission is the call for a comprehensive long-term impact assessment before incurring IFI loans. This includes detailed evaluations of debt sustainability, the effect on human rights obligations, and the overall financial burden on taxpayers. Such assessments must be presented to both Parliament and the South African Human Rights Commission for comprehensive review and consideration.
Democratising Decision-making and Political Responses
Parliament must assert its role in the decision-making process, preventing undue influence from external institutions. Loan agreements and impact assessments should be made public and easily accessible, ensuring accountability and transparency in economic policies that affect the nation’s future.
Gender-Responsive Budgeting in IFI Lending
IFI loans should align with South Africa’s gender-responsive policies. Ensuring equality in the distribution of grants and considering the impact on vulnerable groups, such as caregivers, is essential. The establishment of a joint committee for gender-responsive budgeting is recommended to align IFI loans with our nation’s commitment to gender equality.
Accountable Standards and Information Disclosure
Improved standards of consultation, accountability, and information disclosure are pivotal. IFIs should provide transparent and detailed information on loan agreements, and Parliament should reject loans lacking meaningful consultation and transparency.
Conclusion and Recommendations
This submission urges prompt action by Parliament to address the challenges associated with IFI loans. Recommendations include enhanced oversight, public disclosure of loan agreements, and improved stakeholder engagement to align economic policies with the nation’s best interests. A moratorium on specific IFI loans is suggested until adequate reforms are implemented.
This submission represents the collective views of undersigned civil society and trade union representatives.
Amaarah is a Junior Programme Officer in the Rethinking Economics for Africa project. She is currently studying towards her Masters in Applied Development Economics at Wits University. 
Dr James Musonda is the Senior Researcher on the Just Energy Transition at the IEJ. He is also the Principal Investigator for the Just Energy Transition: Localisation, Decent Work, SMMEs, and Sustainable Livelihoods project, covering South Africa, Ghana, and Kenya.
Dr Basani Baloyi is a Co-Programme Director at the IEJ. She is a feminist, development economist and activist. She gained her research experience while working on industrial policy issues in academia, at the Centre For Competition, Regulation and Economic Development (CCRED) and Corporate Strategy and Industrial Development (CSID) Unit.
Dr Andrew Bennie is Senior Researcher in Climate Policy and Food Systems at the IEJ. He has extensive background in academic and civil society research, organising, and activism. Andrew has an MA in Development and Environmental Sociology, and a PhD in Sociology on food politics, the agrarian question, and collective action in South Africa, both from the University of the Witwatersrand.
Juhi holds a Bachelor of Arts degree in International Relations and Sociology from Wits University and an Honours degree in Development Studies from the University of Cape Town. Her current research focus is on social care regimes in the South African context, with a particular focus on state responses to Early Childhood Development and Long-Term Care for older persons during the COVID-19 pandemic. Her other research areas include feminist economics, worlds of work and the care economy.
Bandile Ngidi is the Programme Officer for Rethinking Economics for Africa. Bandile has previously worked at the National Minimum Wage Research Initiative and Oxfam South Africa. He holds a Masters in Development Theory and Policy from Wits University. He joined the IEJ in August 2018. Bandile is currently working on incubating the Rethinking Economics for Africa movement (working with students, academics and broader civil society). 
Liso Mdutyana has a BCom in Philosophy and Economics, an Honours in Applied Development Economics, and a Masters in Applied Development Economics from Wits University. His areas of interest include political economy, labour markets, technology and work, and industrial policy. Through his work Liso aims to show the possibility and necessity of economic development that prioritises human wellbeing for everyone.
Joan Stott holds a Bachelor of Business Science in Economics and a Master’s in Economics from Rhodes University. She brings to the IEJ a wealth of experience in public finance management, policy development, institutional capacity-building, and advancing socioeconomic and fiscal justice.
Siyanda Baduza is a Junior Basic Income Researcher at IEJ. He holds a BSc in Economics and Mathematics, an Honours degree in Applied Development Economics, and is currently completing a Master’s degree in Applied Development Economics at the University of the Witwatersrand. Siyanda’s research focuses on the impacts of social grants on wellbeing, with a particular focus on the gendered dynamics of this impact. His interests include applied micro-economics, policy impact evaluation, labour markets, gender economics, and political economy. He is passionate about translating economic research into impactful policy.
Shikwane is a Junior Programme Officer at IEJ focusing on civil society support and global governance in the G20. He has a background in legal compliance, IT contracting and student activism. He holds degrees in Political Studies and International Relations, as well as an LLB, from the University of the Witwatersrand.
Dr Tsega is a Senior Researcher focusing on Women’s Economic Empowerment within the G20. She examines gender equity in economic policy, with expertise in food systems and small enterprise development. She holds a PhD in development studies from the University of the Western Cape, an MA in Development Economics, and degrees in Development Studies and Economics from UNISA and Addis Ababa University.
Nerissa is a G20 Junior Researcher at IEJ, focusing on advancing civil society priorities within the G20 framework. She bridges data, research, and policy to advance inclusive economic frameworks. She is completing a Master’s in Data Science (e-Science) at the University of the Witwatersrand, and holds Honours and Bachelor’s Degrees in International Relations with distinction. She has worked as a Research Fellow at SAIIA and a Visiting Research Fellow at Ipea in Brazil.
Dr Mzwanele is a Senior Researcher supporting South Africa’s G20 Sherpa with policy research. He holds a PhD in Economics from the University of Birmingham and an MSc from the University of the Witwatersrand. His work covers open macroeconomics, trade, finance, and higher education policy, and he has published widely on inequality, unemployment, household debt and higher education curriculum reform.
Kamal is the Project Lead for IEJ’s G20 work, focusing on sovereign debt and development finance. He holds a BComm (Hons) in Applied Development Economics from the University of the Witwatersrand and an Erasmus Mundus Joint Masters in Economic Policies for the Global Transition. He has worked with SCIS, UNCTAD and co-founded Rethinking Economics for Africa.