‘SA Has Highest Debt Level In Its History’ – IMF

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Riyaz Patel

South Africa’s public debt, which is approaching 60% of economic output – seen as a red line by ratings agencies, is reaching uncomfortable levels, a senior International Monetary Fund (IMF) official warned Thursday.

“South Africa has the highest level of debt in its history,” the IMF’s resident representative in South Africa, Montfort Mlachila, told a Johannesburg briefing on SA’s macroeconomic outlook.

“This is actually quite concerning without a doubt,” he said.

“The public debt trajectory is not favourable and becoming uncomfortable.”

There were heightened expectations that the period following South Africa’s May poll would usher in certainty and increased confidence levels.

However, a rising fiscal and Eskom burden and ANC infighting in tandem with global tensions, has deepened South Africa’s economic crisis.

In July, the government said it would hand power utility Eskom R59 billion of additional financial support over the next two years, on top of an already-promised bailout of R230 billion spread over the next decade.

The announcement spooked investors and credit agencies.

Finance Minister Tito Mboweni warned shortly afterwards that this and other bailouts for state firms would almost certainly push up the budget deficit as well as state borrowing, raising the prospect of emergency external loans.

“SA Government has not asked for a loan and we don’t think SA needs one.”


“South Africa has not requested an IMF-supported programme. We do not see a balance of payments need. So as far as we are concerned, there’s no need for South Africa to approach the IMF,” Mlachila said.

Mlachila, added however, the debt trajectory, forecast at 55% of GDP in February by treasury but likely to be revised upwards at the October mini-budget, was worrying.

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