South Africa sinking further into debt, warns Godongwana
The country is spending more on servicing debt than on health and policing.
Finance Minister Enoch Godongwana says South Africa is sitting with R4 trillion worth of debt and is sinking further in it.
Godongwana tabled his maiden Medium-Term Budget Policy Statement in Parliament on Thursday afternoon.
"The R4 trillion in debt that we now owe is incurring debt service costs that will become the largest portion of spending, compared to individual functions, from next year,” he warned.
"These debt service costs are non-discretionary – in other words, we cannot avoid paying them. Their effect, therefore, is to crowd-out other spending priorities.
"Debt-service costs are expected to rise from R269.2 billion in 2021/22 to R365.8 billion in 2024/25. This is higher than the health and police services budgets."
Godongwana says economic reform, investment and productivity cannot happen in the dark.
"Our first and immediate task, in this regard, must be to ensure stable energy supply, reduce the risk of load-shedding and accelerate the transition to renewable energy sources.
All of our efforts over the past 13 years have been to fix Eskom, instead of addressing security of supply by adding additional capacity to the grid.
"We have already made significant progress in correcting this: the amendment of Schedule 2 of the Electricity Regulation Act of 2006, has raised the licensing threshold from 1 to 100 megawatts."
