Why SA borrowing from IMF may not be a good idea

After International Monetary Fund's (IMF) Director, Christine Lagarde added South Africa to her annual African tour, there has been speculation as to why she included it in her visit.

Lagarde met with President Cyril Ramaphosa and the Reserve Bank Governor Lesetja Kganyago to speak about South Africa's economic reforms.

Read: IMF bailout: What it is (and whether South Africa will soon need one)

Questions are being asked as to whether South Africa is seeking a loan from the IMF.

Pretoria University's Professor Daniel Bradlow says the reasons countries make use of the IMF, is to get financial support when they have a balance of payments problem.

You go to the IMF to deal with that problem. When the IMF gives that money, like any lender they insist on conditions to be attached to that. In the case of the IMF, their conditions are usually policy conditions.

Professor Daniel Bradlow, International Development Law and African Economic Relation, University of Pretoria

This means that the government's room for making its own policies would be limited. The conditions the IMF attaches to money borrowed can be very controversial in many countries, he explains.

Bradlow believes that because of the many IMF conditions, borrowing money from it is bad news for any country. He also adds that the IMF's history in African countries has not been good as these countries end up being dependent on the IMF.

Listen below to hear the professor explain what borrowing money from the IMF could mean for SA:


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