The Department of International Relations and Cooperation (DIRCO) on Tuesday set the record straight about South Africa’s Economic Assistance Agreement with Cuba.
A day earlier, Ashor Sarupen the Democratic Alliance MP and Shadow Deputy Minister of Finance requested Parliament’s Appropriations Committee Chairperson Sfiso Buthelez to summon DIRCO to explain why it “intends to donate R350 million” to Cuba.
Responding to the Parliamentary Question from the DA on the Economic Assistance Package (EAP), of R350 Million to Cuba, signed on 3 February 2012 in Pretoria, International Relations and Cooperation Minister Dr. Naledi Pandor explained that the agreement consisted of three Facilities:
Facility A of the Package (a grant of R40 million for the purchase of seeds);
Facility B (a solidarity grant of R100 million for the purchase of goods in the South African market) which has been implemented and completed; and
Facility C, which was a credit facility amounting in total to R210 million for the procurement of SA goods, split into two tranches as per the signed Agreement.
DIRCO said the first tranche (Tranche A) of R70 million under Facility C was available immediately on entry into force of the Agreement; and the second tranche of R140 million became available after the repayment of the initial R70 million.
She said the first tranche of R70 million, Cuba only requested R63 million for disbursement, and the loan was fully repaid.
Access was then granted to the second tranche (Tranche B) of R140 million.
“The government of Cuba repaid the first tranche with interest in June 2019,” explained DIRCO.
“The second tranche was then granted in 2021. The second tranche is payable bi-annually.”
“The first installment date was 31 December 2021 and the last installment is due on 30 June 2026.
DIRCO said the EPA expired on 17 July 2021, but in terms of Article 11 of the Agreement, the Agreement will remain in force until all obligations of the Parties have been fulfilled.
“Therefore as far as the repayment of the money under Facility C is concerned, the Agreement will remain in force until the money is repaid by Cuba.
“Minister Pandor has clarified that there is no link between what is currently before the courts, namely the donation of humanitarian aid to the value of R50 million, and the Agreement that was signed in 2012 to make available an EAP of R350 million to Cuba that consisted of grants and a loan facility to be repaid with interest by Cuba.
“Funds under the EAP could also only be used to procure goods in the South African market, which is beneficial to the South African economy.”
