As a percentage of GDP, South Africa’s net debt has grown from 21.8 percent at the start of the financial crisis in 2008/09 to 40.8 percent in 2014/15, Finance Minister Nhlanhla Nene said on Wednesday. debt
Nhlanhla was addressing delegates from 35 countries attending an international debt management conference in Johannesburg, under the theme: “Public Debt Management in an Uncertain Era”.
“Revenue collection has underperformed due to weak economic growth, leading to increased debt accumulation to support the fiscal stance,” the minister said.
The government has expanded its debt in response to difficult economic circumstances, he said.
On the other hand, advanced economies took extraordinary measures to ease monetary policy to counter the effects of the crisis, taking their interest rates to near zero, according to Nene.
“The impact of this on emerging economies was an unprecedented rise in inflows that led to an appreciation in local currencies,” he said.
South Africa’s fiscal stance is underpinned by three principles of counter cyclicality, intergenerational equity and long-term debt sustainability, said Nene.
In line with this, the government has committed itself to narrowing the budget deficit and stabilising debt by introducing and sticking to expenditure ceilings and taking measures to raise revenue, he said.
As far as sound debt management is concerned, there are a few non-negotiables, he said.
These include prudent macroeconomic policies, fiscal and monetary discipline, building a strong and liquid local currency bond markets and promoting policies that make a country an investment-friendly destination. Enditem



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