{"id":94721,"date":"2025-12-28T19:27:06","date_gmt":"2025-12-28T19:27:06","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis"},"modified":"2025-12-28T19:33:58","modified_gmt":"2025-12-28T19:33:58","slug":"south-africas-forgotten-debt-crisis","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis","title":{"rendered":"South Africa\u2019s forgotten debt crisis"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa\u2019s debt crisis is worse than many may think, as combining municipal debt and national debt brings the country\u2019s debt burden closer to 95% of GDP.<\/p>\n

While much attention is given to South Africa\u2019s national debt figures, which are projected to improve over the next few years, many ignore municipal debt figures<\/p>\n

In addition, state-owned enterprises (SOEs) in South Africa remain heavily reliant on government support, weighing on the state\u2019s balance sheet and adding to its contingent liabilities.<\/p>\n

This is according to Efficient Group chief economist Dawie Roodt, who recently outlined South Africa\u2019s debt crisis in an interview with Sakeliga.<\/p>\n

Roodt explained that there are three \u201clevels\u201d of government in South Africa that are important to consider when looking at the country\u2019s debt burden \u2013 local authorities, SOEs, and the national government.<\/p>\n

He explained that, while most economists will refer to national debt levels, municipal debt has gone largely unnoticed, but is increasing rapidly.<\/p>\n

He said municipal debt is not included in the headline national debt figures that the Finance Minister reports on in his Budget speeches.<\/p>\n

\u201cThe local authorities, they can\u2019t wash their own faces anymore. The majority of them, in fact, are getting a huge amount of money from the Minister of Finance, and their own debt has been increasing quite substantially recently,\u201d Roodt said.<\/p>\n

\u201cIn the meantime, they\u2019re standing outside the door of the Minister of Finance and also want some more money.\u201d<\/p>\n

He said the same goes for SOEs, with many no longer able to \u201cstand on their own feet financially\u201d and have become reliant on government support.<\/p>\n

South Africa\u2019s government guarantees to SOEs have ballooned from R64.5 billion in 2008 to R707.8 billion in less than two decades.<\/p>\n

Other public institutions, like the Road Accident Fund, also run at severe deficits that should, according to Roodt, be included when looking at the national government\u2019s fiscal accounts.<\/p>\n

Therefore, Roodt explained that discussions surrounding national debt need to include these liabilities to achieve a holistic view of the country\u2019s debt burden.<\/p>\n

\u201cIf you really want to be honest, you have to include the local authorities, and you have to include the state-owned enterprises, because they\u2019ve become the problem of the Minister of Finance,\u201d he said.<\/p>\n

\u201cAnd if you do that, then debt is actually well in excess of 90% or 95% of GDP.\u201d<\/p>\n

Taxpayers in trouble<\/b><\/p>\n

Roodt\u2019s comments come as South Africa\u2019s national government is seemingly on a more positive fiscal trajectory.<\/p>\n

The country is set to achieve a primary budget surplus and stabilise its debt in the 2025\/26 financial year.<\/p>\n

Roodt attributed these positive developments to Finance Minister Enoch Godongwana\u2019s restraints on government spending and his implementation of fiscal consolidation.<\/p>\n

However, he noted that the state has only achieved a primary budget surplus, which means that the government is still running at a significant deficit when factoring in debt service costs.<\/p>\n

He said that this is deeply concerning, as it means South African taxpayers, likely for generations to come, will need to continue servicing the government\u2019s debt.<\/p>\n

\u201cThe tax burden is equal to state expenditure, because that deficit is nothing but postponed taxes \u2013 somebody\u2019s going to pay for that, your kids are going to pay for that one day,\u201d he said.<\/p>\n

\u201cAnd the more we postpone taxes, the bigger the tax burden will be on our kids eventually and on the economy going forward.\u201d<\/p>\n

At current debt levels, around 22% of the tax collected in South Africa goes solely towards servicing state debt. In other words, 22 cents of every R1 collected in tax is spent on paying the interest on the government\u2019s debt.<\/p>\n

Debt servicing costs crowd out government spending on more productive facets of the economy, like infrastructure, healthcare, education and police services.<\/p>\n

This is the result of South Africa\u2019s government running consecutive budget deficits for the past 15 years, which saw the state\u2019s debt burden rise from around R627 billion in 2008 to over R5 trillion in 2025.<\/p>\n

South Africa\u2019s lacklustre economic growth has also played a significant role, as the economy has not grown fast enough to keep pace with government spending and the rise in state debt over the past few decades.<\/p>\n

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

Africa-Press – South-Africa. South Africa\u2019s debt crisis is worse than many may think, as combining municipal debt and national debt brings the country\u2019s debt burden closer to 95% of GDP. While much attention is given to South Africa\u2019s national debt figures, which are projected to improve over the next few years, many ignore municipal debt […]<\/p>\n","protected":false},"author":84,"featured_media":94720,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7],"tags":[275],"class_list":["post-94721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","tag-south-africa-2"],"yoast_head":"\nSouth Africa\u2019s forgotten debt crisis - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa\u2019s debt crisis is worse than many may think, as combining municipal debt and national debt brings the countr ...\" \/>\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-africas-forgotten-debt-crisis\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africa\u2019s forgotten debt crisis\" \/>\n<meta property=\"og:description\" content=\"South Africa\u2019s debt crisis is worse than many may think, as combining municipal debt and national debt brings the countr ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis\" \/>\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=\"2025-12-28T19:27:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-28T19:33:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/12\/sm_1766937722.562098.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"683\" \/>\n\t<meta property=\"og:image:height\" content=\"378\" \/>\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=\"4 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-africas-forgotten-debt-crisis#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africa\u2019s forgotten debt crisis\",\"datePublished\":\"2025-12-28T19:27:06+00:00\",\"dateModified\":\"2025-12-28T19:33:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis\"},\"wordCount\":720,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/12\/sm_1766937722.562098.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\",\"head lines\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africas-forgotten-debt-crisis\",\"name\":\"South Africa\u2019s forgotten debt crisis - 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