South Africa: Country Writes Off Cuba's Debt of R926m

(us $117 M)

Wyndham Hartley, Cape Town

SA has written off nearly R1bn of Cuba's debt as the Caribbean island state is not in a position to repay the debt in the foreseeable future.

This emerged after a post-cabinet news briefing yesterday when chief government spokesman Themba Maseko said Cuba's debt position also had the potential to undermine bilateral economic relations between the two countries.

He said the cancellation of the R926,8m debt owed by Cuba to SA had been approved.

"This debt arose out of the insurance cover provided to Cuba by the Export Credit Insurance Corporation of SA for the export of diesel engines and pesticides in 1996.

"Given the assessment of Cuba's debt position, the government is of the view Cuba is not in a position to meet its obligation in the foreseeable future.

"The Cuba debt position has the potential to undermine the bilateral economic relations and distracts the two countries from the pursuit of mutually beneficial relations -- in areas such as biotechnology, pharmaceuticals and the eradication of TB and malaria in Africa, and the strengthening of south-south relations," Maseko said.

The cabinet also approved the redesign of the R5 coins that will be issued this year so that they commemorate the 90th birthday of former president Nelson Mandela.

Maseko said the cabinet also discussed "collusive behaviour" in some sectors of the economy, particularly the food industry.

"The government is confident the competition authorities will continue to be vigilant and to take strong action to curb these negative practices that have also contributed to higher food prices.

"The economic and social cluster ministers were mandated to develop a strategy to address this challenge and to report back to the cabinet in the near future," Maseko said.

Maseko said there were no new cases that had come to the attention of the competition authorities. He said, however, in response to a question, that the cabinet had not discussed the possibility of criminalising collusive behaviour.

If there was a need, however, this could be reviewed.