Treasury should provide clarity on the World Bank loan
21 January 2022
The DA calls on National Treasury to provide clarity on the conditions that were attached to the recently announced R11,4 billion loan extended to South Africa by the World Bank.
In the absence of a loan programme document from the World Bank or an explanatory note from Treasury, South Africans have no way of knowing the purpose of the loan and the associated repayment terms.
South Africa has a substantial national debt burden, with the country currently spending R303 billion annually to service debt. We therefore cannot afford to take on additional debt with no plan to boost economic growth.
With the debt to GDP ratio currently standing at over 70%, South Africa faces the real risk of falling into a debt spiral that can trigger a sovereign debt crisis. It is therefore important that the government holds the fiscal line and does not increase the country’s debt exposure.