Wednesday, 11 June 2025: “SACP denounces imperialist-controlled foreign currency debt accumulation path” – Party statement on recent World Bank loan
SACP Communications
South African Communist Party
“SACP denounces imperialist-controlled foreign currency debt accumulation path” – Party statement on recent World Bank loan
Wednesday, 11 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.
Treasury justifies this latest foreign loan on the basis of modernising energy and freight infrastructure. However, these so-called structural reforms are in fact an extension of the neo-liberal restructuring of our state and economy. The so-called Just Energy Transition Investment Plan is neither just nor a real transition. It is a capitalist-driven offensive against state participation in the economy and public ownership.
According to Eskom’s own schedule, Komati Power Station was fully decommissioned by 31 October 2022. Publicly owned power stations decommissioning was scheduled for Camden, Hendrina, Grootvlei and Arnot between 2023 and 2031.
According to the Integrated Resource Plan 2019, the government chose a path to decommission 5,400 megawatts of Eskom-generated electricity by 2022, 10,500 megawatts of Eskom-generated electricity by 2030 and a staggering 35,000 megawatts of Eskom-generated electricity by 2050.
The shutdown of publicly owned electric power generation capacity takes place without any major plan to establish new, modern, publicly owned electric power generation capacity. This is nothing short of a structural attack on state participation in energy production.
It is unacceptable that the democratic government is presiding over the destruction of state ownership and participation in electric power generation, when even colonial and apartheid regimes, albeit to serve the interests of their beneficiaries as opposed to everyone because they were racist, ensured that power generation remained under public control.
Under democracy, when the state must be protecting public property rights and building greater levels of public ownership and state participation in the economy in line with the Freedom Charter to serve all on a non-racial and non-sexist basis, the people as whole – of whom the working class is the majority – are now being stripped of their rightful public assets and handed over to private capital under the guise of a “just energy transition”. This directly contradicts the Freedom Charter, which declares that “monopoly industry shall be transferred to the ownership of the people as a whole”.
Instead of strengthening, modernising and expanding state ownership in energy, rail, ports and other critical network infrastructure, such as water, the leading fellows at the helm of the state view and use the government as an instrument of the profit-driven private sector interests, including private power producers and rail operators. This amounts to a new form of privatisation, one that masks itself as structural reform and sustainability but is rooted in neo-liberal dogma. The shift from a producer state to a tender state, where the state’s role is reduced to buying services and goods such as electricity from private capital, is a betrayal of the liberation struggle.
Not unrelated, the South African Reserve Bank is constitutionally mandated to function in the interest of ensuring balanced and sustainable growth in the Republic, yet it has consistently failed – and continues to fail – in meeting this constitutional imperative. Rather than acting as a vehicle for transformation and development, and the mobilisation and deployment of domestic resources to ensure balanced and sustainable growth in the Republic, the central bank has embraced a neo-liberal monetarist framework that serves more the interests of finance capital. This has left working-class needs unmet and is part and parcel of the context under which South Africa is in the middle of the long-term interrelated crises of unemployment, poverty and inequality. This must come to an end.
The SACP calls for an immediate halt to the dangerous path of imperialist-controlled foreign currency debt dependency and neo-liberal policies, including, but not limited to, privatisation and austerity.
We call on Parliament, trade unions, youth and student formations, and progressive civil society to reject this neo-liberal path, oppose the destruction of Eskom, and demand a developmental path anchored in public ownership and people’s power.
The liberation struggle was fought for genuine freedom, including economic emancipation. That struggle continues. Let us defend and deepen public ownership, reject neo-liberalism and build a socialist future.