The federation warns that the funding may deepen the country’s dependence on foreign creditors and trigger austerity-driven reforms.

The World Bank says the funding is intended to support structural reforms aimed at revitalising infrastructure and improving public service delivery. However, SAFTU argues that the conditions attached to such loans often lead to the commercialisation of essential public services and the erosion of national sovereignty.

SAFTU General-Secretary Zwelinzima Vavi described the loan as a return to the structural adjustment policies historically promoted by Bretton Woods institutions.

“This marks a return to structural adjustment programmes championed by institutions like the World Bank and International Monetary Fund. These programmes push for commercialisation and privatisation, essentially opening public infrastructure to profit-driven corporate interests,” Vavi said.

He added that loans denominated in foreign currency expose the country to exchange rate volatility and create pressure for austerity measures, often disguised as fiscal consolidation.

The federation also drew parallels with previous foreign-influenced restructuring, pointing to the creation of ArcelorMittal SA, formerly state-owned ISCOR, as an example of how conditional loans can result in long-term economic and social setbacks.

SAFTU has called for full transparency regarding the terms of the loan and urged government to resist reforms that prioritise investor confidence over the well-being of ordinary South Africans.

--ChannelAfrica--