LENDING UP-DATE FOR SOUTH AFRICA
by John E. Lind, CANICCOR
San Francisco, California, United States
The report says both Frank Chikane of the South African Council of Churches (SACC) and the African National Congress have stated that financial sanctions should remain in place until an interim government is formed. The document includes "ANC statement on foreign debt" by Nelson Mandela reaffirming that they will honor past debts incurred before the debt moratorium of 1985, while reiterating their opposition to new bond issues until "an interim government of national unity has been installed." Refinancing of bond issues increased in 1990, by both Swiss and German banks. By early 1991, international financial markets opened up much more for South Africa; the Export-Import Bank of Taiwan led with a loan of $60 million for the Industrial Development Corporation for Taiwan exports. The U.K. lifted sanctions and the U.S. lifted the Comprehensive Anti-Apartheid Act in the summer of 1991. By this time, the first public bond issue was seen. In late September, J. P. Morgan held the mandate to lead manage a $200 million bond issue for the Independent Development Trust (IDT), saying it would assist blacks obtain housing and education; the contradiction, however, was that the IDT was supposed to be funded primarily out of domestic savings to help reduce inflation and because education and housing do not need foreign inputs. This bond issue has been successfully shelved through pressure from U.S. churches and the ANC. In February 1992, Bayerische Landesbank agreed to lead manage a DM200 million bond issue for the Development Bank of Southern Africa (DBSA), which is 84% owned by the Republic of South Africa. This bank funds development projects in South Africa including the homelands, Lesotho and Mozambique through the governmental structures or their development agents. The report contains a chart, “BONDS SSUED FOR SOUTH AFRICAN BORROWERS.” The report mentions ESKOM, the Department of Posts and Telecommunications, Transnet, AECI Ltd., chemicals, Deutsche Bank, the Lesotho Highland Water Project, foreign exchange, international capital markets, European banks, Cyril Ramaphosa, financial sanctions, Swiss Volksbank, Union Bank of Switzerland, and SATS.
Used by permission of John E. Lind, CANICCOR Research.
Collection: Miloanne Hecathorn papers