South Africa Again Freezes Debt Payment : Delaying Action on Loans Latest Blow to Economy

The battered South African economy suffered a new blow today when the government announced that it will extend until March 31 its freeze on repaying loans to Western banks.

South Africa, mired in a recession, had said after halting payments on the loans Sept. 1 that it planned to resume payments Jan. 1.

Today’s extension was another sign that the government, hit by persistent black riots that have killed about 900 people in 15 months, is having trouble convincing creditors about its pay-back formula.

Concerned over the stability of the white-dominated government, the bankers called in $14 billion in short-term loans that had previously been extended routinely. This put a money squeeze on the government.

Future Loan Trouble

The extension of the debt-repayment freeze hurts the South African economy because the move shows that the government is unable to pay its bills. This means South Africa will have trouble the next time it goes shopping in the West for a loan.

For years, while pressure to dismantle apartheid swelled among South Africa’s trading partners, such as the United States, the government here argued that despite its social system, South Africa was the only country on the continent to pay its bills on time.

In addition, anti-apartheid pressures on American businesses with interests in South Africa has led to a steady withdrawal of U.S. interests in the troubled nation.

Earlier today, police reported that three blacks, including a policeman who was mutilated and his body burned, died in anti-apartheid hostilities in black townships across the nation in the last 24 hours.

Police and witnesses also reported that gangs of black enforcers beat up blacks who violated a Christmas boycott of white retailers.

Police said passers-by discovered the charred body of a black constable near the black township of Mamelodi, outside Pretoria, this morning.

A police spokesman said the constable’s body was mutilated beyond recognition before being set afire. Police officers are favored targets of angry blacks who turn on other blacks seen as collaborators with the apartheid system of racial segregation.

It brought to 18 the number of police killed since day-and-night hostilities began in South Africa on Sept. 3, 1984. All have been black.