OSAGYEFO MAZWAI: Higher for longer rates could mean a better for longer SA
The marginalised suffer most from inflation, and that hardship creates a significant risk of social unrest
On the morning of the budget, I wrote an article that called for the Treasury to use the gold & foreign exchange contingency reserve account (GFECRA) to reduce SA’s debt burden. This was premised on the idea that a reduction in debt would lead to lower interest payments and less need to raise government debt. This would in turn put us on a more sustainable fiscal path and unlock cash flow for spending on delivery of basic services and infrastructure investment.
It was clear from the finance minister’s speech that the state is committed to dealing with SA’s debt problem. There was also a clear commitment to reducing the sovereign risk premium placed on SA given our malignant structural issues. While the initiative was well received, the question now is: how realistic are the budget’s expenditure projections? And what is the outlook for continued primary surpluses and a lower budget deficit?..
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.