End of arms deal payments in sight

2010-10-27 19:10
Cape Town - The last foreign loan repayments for South Africa's multi-billion rand arms deal are in sight, according to the medium-term budget policy statement tabled on Wednesday.

The document details how the repayments, which totalled R800m in 2009/10, will shrink to R352m this year, grow again to R511m in 2011/12, then dwindle to R38m the following year, before vanishing as an item on the national accounts.

The deal, worth R30bn in 1999, included the purchase of corvettes, submarines, light helicopters, fighter trainers and advanced fighter aircraft.

The loan agreements were controversial, more so after a leaked Cabinet document warning that spending of even half that amount could create a situation in which government "could be confronted by mounting economic, fiscal and financial difficulties at some future point".

Arms deal activist Terry Crawford-Browne tried unsuccessfully to show in court that then finance minister Trevor Manuel had acted illegally in signing off the agreements.

The Hawks investigating unit earlier this month announced that it was shutting down a long-running but inconclusive probe into allegations of corruption in the deal.

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