Eskom: SA’s R128bn black hole
With SA unable to get growth going or reform bankrupt state enterprises fast enough, its fiscal position is unravelling
The Eskom bailout, coming on top of weak economic growth and disappointing tax revenue, is set to blow SA’s debt and deficit targets out the water, reigniting downgrade pressure and threatening fiscal sustainability.
In February, the National Treasury said the biggest risks to SA’s fiscal framework were that its revenue and growth forecasts would fail to materialise and state-owned enterprises (SOEs) would require more funding than envisaged. All these risks have materialised, raising doubts over SA’s ability to return to fiscal sustainability in the absence of severe adjustments to spending or taxation.