The government plans to increase the issuance of long-term debt by 33% over the next three years to R2.9-trillion by the 2021-2022 fiscal year, as it seeks to plug the budget deficit.

Most of the funding will be done via the issuance of fixed-rate securities, which will reach R2.1-trillion in 2021-2022, from R1.6-trillion in 2018-2019, according to the medium-term budget policy statement, released on Wednesday.

The government plans to boost the sale of inflation-linked bonds to R753bn by 2021-2022, compared with the R566bn forecast for the current fiscal year. It will continue its policy of issuing more longer-dated bonds to reduce its refinancing risk. “The longer maturity profile allows the government to consider increased issuance in the 5-10 year maturity bracket to reduce debt-service costs,’’ the Treasury said in the statement.

Gross national debt will increase to 58.5% of GDP by 2022, from 55.8% in 2018-2019, reflecting the weaker economy, fluctuations in interest rates, inflation and the exchange rate.

The weakness in the rand in 2018 will account for about 70% of the expected R48bn increase in the debt load, the Treasury said.