South Africa's US2 billion dollar (about R16.58 billion) contribution to an IMF “firewall” could be seen as a sensible investment, Busa said on Tuesday.
“The loan to the International Monetary Fund only represents about four percent of South Africa's forex and is a loan on which the country will earn a return and which will eventually be repaid,” Business Unity SA deputy CEO Raymond Parsons said.
South African business had an important stake in the maintenance of stable global economic growth through appropriate contingency plans.
“It is also inevitable, if South Africa is to enlarge its influence in global agenda-setting structures like the G20, BRICS and the IMF, that it be seen to be making an additional financial commitment at this critical juncture in world economic affairs,” he said in a statement.
The Congress of SA Trade Unions condemned the news.
“South Africa is one of the most distressed economies in the world, with massive levels of unemployment, poverty and inequality... and should therefore be a beneficiary rather than a contributor to such a fund,” spokesman Patrick Craven said in a statement.
“It seems to be an attempt to show international institutions and big powers that South Africa is one of the 'good boys'.”
Earlier on Tuesday the Treasury said the R16.58 billion commitment to the IMF “firewall” was meant to prevent future financial crises. President Jacob Zuma made the undertaking at the G20 summit, a meeting of the world's greatest economies, in Los Cabos, Mexico, spokesman Jabulani Sikhakhane said.
“The funds used for this purpose would be considered part of South Africa's foreign reserves,” he said.
“They will be drawn down only if they are needed and only after other resources have been depleted. The funds will be invested and earn interest.”
Participating countries with no way out of a financial crisis would access the fund through a temporary loan, with conditions, and not purchase agreements to the IMF's general resources account.
Sikhakhane said the funds were committed on the premise that South Africa's voting power and quota shares in the IMF were reformed, as agreed to in 2010.
Presidency spokesman Mac Maharaj, speaking from Mexico, said Brazil, Russia, India, China and South Africa would release a joint statement shortly stating their expectations. - Sapa