Party says this deepens our country’s subordination to imperialist-controlled global finance capital
“SACP denounces imperialist-controlled foreign currency debt accumulation path” – Party statement on recent World Bank loan
Thursday, 12 June 2025: – The South African Communist Party (SACP) denounces the National Treasury’s decision, announced on 9 June 2025, to contract a new US$1.5 billion (approximately R28 billion) foreign-currency loan from the World Bank. This decision deepens our country’s subordination to imperialist-controlled global finance capital, reinforcing a neo-colonial debt regime that erodes national sovereignty, undermines democratic development and threatens the interests of the working class.
The imperialist-controlled foreign currency denominated debt exposes South Africa to external shocks over which the country has no control. When the rand depreciates, the cost of repaying these loans soars, draining public finances. The National Treasury uses this to entrench austerity by presenting itself and the budgets it tables annually in Parliament as concerned about the debt-to-GDP ratio, while its accumulation of foreign currency-denominated debt, instead of sustainable and development-oriented debt in rand, exposes South Africa to severer debt conditions.
Even though our economy is based on rands, imperialist-controlled foreign currency-denominated debt must be serviced in imperialist-controlled currency, which is governed by imperialist-controlled monetary policy, with all the domestic currency exposure to the risk of depreciation. What makes the National Treasury’s obsession with imperialist-controlled foreign currency debt accumulation even more problematic is the fact that South Africa has deep domestic capital pools. These could and should be harnessed to fund public infrastructure and state-led development.
Instead, the National Treasury has once again chosen a colonial-type path of subordinate dependence to imperialist-controlled capital, which comes at the cost of our democratic national sovereignty and economic emancipation. Historically, dating back at least to the 1970s, the regime of International Monetary Fund (IMF) and World Bank loans – especially through their conditionalities – has undermined domestic economic policy sovereignty in many Global South countries.
In nearly every case where domestic economic policy has been shaped by IMF and World Bank conditionalities or associated policy measures, underdevelopment has persisted. Large sections of the population in these countries continue to live in conditions of poverty, mass unemployment, and widening domestic and global inequality. Through their loan conditionalities, among others, the IMF and World Bank have functioned as instruments of the imperialist regime, enforcing neo-liberal policy prescriptions. Where their loans are involved, the agenda is, more often than not, a neo-liberal one.
