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SAFTU REJECTS THE R25 BILLION WORLD BANK LOAN
South African workers have heard these promises repeatedly over the past three decades. Every round of liberalisation has been accompanied by assurances that investment would increase, growth would accelerate and employment would expand. Instead, workers have experienced stagnant growth, deepening unemployment, widening inequality, deindustrialisation and the steady erosion of public services. Since South Africa first entered the Development Policy Loan programme in 2022, government has borrowed approximately US$4.25 billion (approximately R69.4 billion). from the World Bank. Yet neither the World Bank nor National Treasury has published an independently verified assessment demonstrating how many jobs these loans have actually created, how much additional investment they have generated or how they have improved the lives of ordinary South Africans. Workers are once again being asked to trust projections generated by economic models rather than measurable outcomes. The facts tell a very different story. South Africa’s economy grew by only 0.6% in both 2023 and 2024. Such anaemic growth is insufficient even to keep pace with population growth, meaning that income per person has continued to stagnate or decline. Although real GDP increased marginally during the first quarter of 2026, this does not alter the longer-term picture of weak economic growth, declining productive investment and continuing deindustrialisation. The labour market presents an even more devastating indictment. Statistics South Africa reported that approximately 345,000 jobs were lost during the first quarter of 2026, while the official unemployment rate increased to 43%. Millions more remain unemployed, discouraged or trapped in insecure and precarious work. These are the real outcomes against which the World Bank’s latest promises must be judged. The relevant question is therefore not whether isolated jobs may have been created somewhere in the economy, but whether the Development Policy Loans have delivered the broad-based growth and employment repeatedly used to justify them. On the available evidence, they have not. Until government and the World Bank publish independently verified evidence of the developmental outcomes of these loans, workers are fully justified in questioning yet another set of promises based on projections rather than experience. DEVELOPMENT POLICY LOANS – STRUCTURAL ADJUSTMENT BY ANOTHER NAME History explains why workers approach these loans with deep scepticism. Across Africa, Latin America and much of the developing world, the World Bank and the International Monetary Fund (IMF) used lending programmes to impose Structural Adjustment Programmes (SAPs) as conditions for financial assistance. Governments were required to privatise state-owned enterprises, liberalise trade and financial markets, deregulate labour markets, reduce public expenditure, freeze public-sector wages, retrench workers, commercialise public services and shrink the developmental role of the state. These programmes were presented as the pathway to growth, investment and prosperity. Instead, many countries experienced deindustrialisation, weakened productive capacity, declining food security, rising unemployment, deepening poverty, widening inequality and increased dependence on foreign capital and imports. Rather than narrowing the development gap between rich and poor nations, they entrenched unequal patterns of development across much of the Global South. Development Policy Loans are Structural Adjustment Programmes by another name. The terminology has changed, but the underlying philosophy remains remarkably similar: liberalisation, privatisation, fiscal austerity, commercialisation and a reduced role for the developmental state. South Africans are therefore entitled to ask whether this latest loan represents a genuine break from the past, or merely the latest chapter in a model whose social and economic consequences are already well known. The World Bank argues that these reforms are necessary to improve efficiency and attract investment. SAFTU does not oppose efficiency, investment or economic reform. We oppose reforms that subordinate public need to private profit, weaken democratic public institutions, undermine decent work and reduce the state’s capacity to drive inclusive development. South Africa’s challenge is not that the state is too involved in the economy. The real crisis is that decades of deindustrialisation, underinvestment, corruption, state capture and misguided economic policy have weakened state institutions while leaving millions without work, hope or economic security. The answer is to rebuild capable, democratic and accountable public institutions – not to retreat from public ownership and developmental planning. This debate is therefore not simply about one loan. It is about the development path South Africa chooses. Will our future be shaped by the priorities of international finance and market liberalisation, or by a democratic developmental state committed to industrialisation, decent work, public ownership and shared prosperity? THE WORLD BANK, NEOLIBERALISM AND DEMOCRATIC SOVEREIGNTY The World Bank is not merely a source of development finance. For decades it has been one of the principal institutions promoting the neoliberal policy framework commonly known as the Washington Consensus. This model places its faith in market liberalisation, deregulation, privatisation, fiscal restraint and the expansion of private capital into sectors historically regarded as public goods. SAFTU rejects the notion that there is no alternative to this model. South Africa’s democratic breakthrough was never intended to replace apartheid with a market-driven economy that leaves millions unemployed while wealth becomes increasingly concentrated in a few hands. Political freedom without economic transformation can never fulfil the aspirations embodied in the Freedom Charter’s economic demands or the Constitution. Nor can Africa’s development challenges be understood in isolation from the unequal global economic order. While colonial rule formally ended across much of the continent decades ago, many African countries remain trapped in patterns of dependency sustained by unequal trade relations, debt, illicit financial flows, profit repatriation and policy prescriptions that continue to privilege the interests of global finance over national development. This is why many scholars and progressive movements describe the current global order as one of neocolonialism where economic dependence replaces direct political control. South Africa must therefore guard against surrendering its policy space through debt agreements that narrow democratic choices. The country’s development strategy must be determined by its elected institutions, informed by meaningful engagement with workers, communities and civil society—not by external institutions whose primary accountability lies elsewhere. SAFTU believes South Africa requires bold reforms to overcome the electricity crisis, modernise rail and ports, improve logistics and secure reliable water infrastructure. The real question is not whether reform is necessary, but what kind of reform serves the public interest. Our strategic public enterprises exist to provide affordable services, support industrialisation, create decent employment and advance developmental objectives. They should not be reduced to commercial assets whose primary purpose is to generate returns for private investors. The objective must be to rebuild capable, transparent and accountable public institutions – not to weaken them through creeping privatisation or public-private partnerships that ultimately socialise risk while privatising profit. South Africa’s infrastructure crisis is the product of years of corruption, state capture, underinvestment, poor governance and policy inconsistency. It cannot be solved simply by opening strategic sectors to greater private participation. Sustainable development requires rebuilding state capacity, investing in public institutions, strengthening democratic oversight and mobilising both public and domestic resources to drive industrialisation and inclusive growth. DOLLAR-DENOMINATED DEBT, AUSTERITY AND THE BURDEN ON WORKERS SAFTU is particularly concerned that this loan is denominated in United States dollars. While government currently estimates its value at approximately R25 billion, the actual cost to South African taxpayers will ultimately depend on the future performance of the rand against the US dollar. Should the rand depreciate as it has repeatedly done over the past three decades, the cost of servicing and repaying this loan could increase substantially, imposing a far heavier burden than is currently being presented to the public. This is one of the enduring dangers of foreign currency borrowing. Governments may negotiate what appears to be a favourable loan, only to discover years later that exchange-rate movements have dramatically increased the repayment burden. Across the developing world, many countries have found themselves devoting an ever-growing share of public resources to servicing foreign debt instead of investing in health care, education, housing, public transport and productive infrastructure. Debt servicing is never politically neutral. Every rand allocated to repay creditors is a rand that cannot be invested in creating decent jobs, expanding social protection, rebuilding municipalities or strengthening public services. Workers and the poor ultimately pay the price through wage restraint, spending cuts, increased taxation, deteriorating services and repeated calls for fiscal austerity. South Africans know this experience all too well. For years, workers have been told that there is no money for filling vacant posts in hospitals and schools, no money to employ more teachers, nurses or police officers, no money to improve municipal services, and no money to expand social protection. Yet government continues to accumulate debt while accepting an economic framework that repeatedly shifts the burden of adjustment onto working people rather than addressing the structural causes of the crisis. The central question therefore is not simply whether South Africa requires financing. It is whether borrowing should reinforce an economic model that has consistently failed to generate inclusive growth, decent work and structural transformation. Borrowing can only be justified if it expands the productive capacity of the economy, strengthens public institutions, supports industrialisation and improves the living standards of the overwhelming majority, not if it deepens dependence on debt while exposing the country to future austerity. SAFTU therefore cautions against presenting this facility as a low-cost solution to South Africa’s developmental challenges. The true cost of any loan is measured not only by the interest rate, but also by its policy consequences, its exchange-rate risks and the social sacrifices that may ultimately be demanded to repay it. ILLICIT FINANCIAL FLOWS, FORCED MIGRATION AND AN ALTERNATIVE DEVELOPMENT PATH SAFTU finds it deeply ironic that African countries are repeatedly encouraged to borrow from international financial institutions while simultaneously losing vast amounts of wealth every year through illicit financial flows, aggressive tax avoidance, profit shifting, transfer pricing and the repatriation of corporate profits. The continent exports enormous wealth bu Back |
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