{"id":62480,"date":"2024-03-09T15:50:17","date_gmt":"2024-03-09T15:50:17","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem"},"modified":"2024-03-09T16:07:35","modified_gmt":"2024-03-09T16:07:35","slug":"south-africa-has-a-growth-problem-not-a-debt-problem","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem","title":{"rendered":"South Africa has a growth problem \u2013 not a debt problem"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>Finance Minister Enoch Godongwana said the size of South Africa\u2019s debt is not the problem but rather the economy\u2019s capacity to service the debt.<\/p>\n

In the 2024 Budget, Godongwana revealed that South Africa\u2019s net loan debt has grown to R5.06 trillion \u2013 71.7% of the country\u2019s GDP.<\/p>\n

The government\u2019s debt burden has continued to grow over the past few years and is now well above the average of 50% in emerging markets.<\/p>\n

South Africa has continued to spend more money than the government can collect in tax revenue, resulting in consistent budget deficits, which have been plugged by borrowing more.<\/p>\n

These consistent deficits and high government expenditures have led the government to rack up billions in debt.<\/p>\n

This has also seen the government\u2019s debt servicing costs skyrocket, and it is now one of the largest spending items in the budget.<\/p>\n

Godongwana also revealed that debt-service costs will absorb more than 20% of revenue.<\/p>\n

\u201cTo put this into perspective, spending on debt-service costs is greater than the respective budgets of social protection, health, or peace and security,\u201d he said.<\/p>\n

However, Godongwana told SABC News that this issue with South Africa\u2019s debt burden is not its size.<\/p>\n

He pointed to countries like Japan, Italy, and the US, which have debt-to-GDP ratios well over 100%.<\/p>\n

\u201cNo one worries because it is the capacity of the economy to service the debt that is important,\u201d he explained.<\/p>\n

\u201cThe problem with us is not the size of our debt \u2013 it is a growth issue. It\u2019s the capacity of our economy to service that debt, and we can only deal with that capacity when we grow the economy substantially.\u201d<\/p>\n

However, he acknowledged that in the absence of that growth, the National Treasury must minimise the impact of this rising debt on the economy.<\/p>\n

This is why the government dipped into the Reserve Bank\u2019s gold and foreign exchange reserves account.<\/p>\n

Godongwana announced during the Budget Speech that the National Treasury will restructure reserves held at the Reserve Bank to free up R150 billion over three years.<\/p>\n

The account, known as the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), showed paper profits of R507.3 billion as of January.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. Finance Minister Enoch Godongwana said the size of South Africa\u2019s debt is not the problem but rather the economy\u2019s capacity to service the debt. In the 2024 Budget, Godongwana revealed that South Africa\u2019s net loan debt has grown to R5.06 trillion \u2013 71.7% of the country\u2019s GDP. The government\u2019s debt burden has […]<\/p>\n","protected":false},"author":84,"featured_media":62479,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-62480","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nSouth Africa has a growth problem \u2013 not a debt problem - South Africa<\/title>\n<meta name=\"description\" content=\"Finance Minister Enoch Godongwana said the size of South Africa\u2019s debt is not the problem but rather the economy\u2019s capac ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africa has a growth problem \u2013 not a debt problem\" \/>\n<meta property=\"og:description\" content=\"Finance Minister Enoch Godongwana said the size of South Africa\u2019s debt is not the problem but rather the economy\u2019s capac ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2024-03-09T15:50:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-09T16:07:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/03\/sm_1709987781.777706.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africa has a growth problem \u2013 not a debt problem\",\"datePublished\":\"2024-03-09T15:50:17+00:00\",\"dateModified\":\"2024-03-09T16:07:35+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\"},\"wordCount\":385,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2024\/03\/sm_1709987781.777706.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-has-a-growth-problem-not-a-debt-problem\",\"name\":\"South Africa has a growth problem \u2013 not a debt problem - 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