On the 14th November the Minister of Finance Pravin Gordhan, in the presence of a World Bank official and on behalf of the government of South Africa, signed for a R1.9 billion loan from the World Bank. The money is to be used for Eskom’s electricity generators. The loan is payable in forty years at 0.25% interest. A country that accepts a World Bank loan is required to enter into an agreement with the International Monetary Fund (IMF). The World Bank and IMF work hand in glove.
It is unbelievable that in the 21st century South Africa can borrow money from the World Bank when there are known problems associated with amortisation and interests. The World Bank most probably insisted on land as collateral. World Bank loans are used to ensnare countries into an unending debt. The World Bank and IMF loans employ conditionalities which involves highly controversial requirements such as austerity or privatization of key public services. Conditionalities imposed on borrower countries are known as Structural Adjustment Programmes.