Finance Minister Tito Mboweni has sounded the alarm bell on the country’s debt trajectory – warning that the country must change course or go bust.
Mboweni said the country should rally behind fiscal rehabilitation and growth. “Right now, government is borrowing at a rate of R2.1 billion per day. Madam Speaker, we must be careful to avoid the fate of countries like Argentina and Ecuador that defaulted on their debt this year,” Mboweni said.
“Countries that find themselves in default see sharp GDP contractions and currency depreciations. On current trends, more of our taxes are being transferred to bondholders, rather than to critical services for our people. An uncontrolled increase in borrowing costs would harm small businesses, ordinary South Africans and the poor the most.”
