SA's debt burden a matter of serious concern

CAPE TOWN - While the National Treasury has used the windfall from tax collections to cut some of the country’s debt, which has hamstrung the economy for decades, Finance Minister Enoch Godongwana said that the burden remained a matter of serious concern.

The government will spend R302 billion in 2022/2023 on debt service costs, also confirming that it will seek more loans to finance some of its expenditure.

This is amid an uproar from some sections of society which have been calling on the government to hold back on borrowing more from international lenders who some feel could pressure South Africa into surrendering its sovereignty.

National Treasury said that on average, 20 cents of every rand collected in revenue each year will be needed to pay debt-service costs.

In the next three years, South Africa will spend R1 trillion to service its debt.

Finance Minister Godongwana said that government debt reached R4.3 trillion and was projected to rise to R5.4 trillion over the medium term.

In a briefing with journalists before the speech on Wednesday, Godongwana defended the government’s decision to keep borrowing, saying that those opposed to it were doing so based on outdated ideological stances.

"Now the ANC took a view in 1992 and it still prevails - it's never been changed in any conference - that we will interact with World Bank and the IMF but we'll jealously guard our sovereignty," he said.

Just last month, the World Bank approved an R11 billion loan for South Africa.