KHAYA SITHOLE: Lack of blueprint for economy caused public funding crisis
Debt-to-GDP ratio of 75% due to party’s inability to develop plan to respond to socioeconomic conditions
On Friday, while the country waits impatiently for a budget, one of the primary drivers of the budget crisis will come into focus. The National Treasury, which has been responsible for implementing a borrowing spree premised on the demands made by government departments and political principals over the past 15 years, will honour its next series of interest obligations for the various bonds it has in issue. The amount — R46bn — is part of an annual interest bill estimated to top R382bn this budget cycle and then expected to escalate to R414bn in the next cycle.
The scale of the interest commitment illustrates just how deeply in debt SA finds itself. The current debt-to-GDP ratio of 75% is a significant acceleration from the 23.6% of the immediate post-crisis period which, coincidentally, coincided with the aftermath of the tectonic political shifts of the ANC’s Polokwane conference. Since then, as the ANC maintained its political hegemony while balancing its commitments to s...
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