Mboweni cautioned that the downturn brought on by Covid-19 will add to South-Africa’s debt burden, which is now projected to be close to R4 trillion, or 81.8% of Gross Domestic Product (GDP) by the end of this fiscal year. This is compared to an estimate of R3.56 trillion or 65.6% of GDP projected in February. He was referring to the country facing a sovereign debt crisis, which is when a country can no longer pay back the interest or principal on its borrowings. The country’s debt has been rising as a proportion of the nation’s GDP for some years. [1] The previous debt crisis of the 1990s is still fresh. The Minister made the declaration during a virtual discussion of the Bloomberg Capital Markets Focus: South Africa on Tuesday. Download the EWN app to your iOS or Android device. KAMPALA, Uganda (AP) — Facing financial difficulties aggravated by the coronavirus pandemic, the southern African nation of Zambia appears headed for a default on debt owed to private investors. The list of sovereign debt crises involves the inability of independent countries to meet its liabilities as they become due. The MTBPS seeks to shift government's priorities and cement policies that drive economic recovery and fiscal consolidation. South Africa’s projected total consolidated budget spending, including debt service costs, will exceed R2 trillion for the first time ever, he said. South Africa is faced with two gates – a broad gate to bankruptcy and a narrow gate to prosperity. “We are still some way from [the gate to bankruptcy]. Mboweni was … He was referring to the country facing a sovereign debt crisis, which is when a country can no longer pay back the interest or principal on its borrowings. Amid falling prices of raw materials, recession, and now COVID-19, Africa is in serious trouble as debt burden grows. We cannot allow ourselves to move towards a sovereign debt crisis.". South Africa’s government is committed to reining in its debt and will avoid a sovereign debt crisis, President Cyril Ramaphosa said. ... Mboweni said the bulk of government bonds is held by domestic banks, and in the event of a sovereign debt crisis, that would result in a banking crisis. The debts of South Africa’s states and local government are not counted as part of the country’s national debt. And if the country does not act now, it will shortly find itself on the path of bankruptcy, Finance Minister Tito Mboweni warned today. South African banks are not as heavily loaded with sovereign debt, so the sovereign-bank link is not as strong. Ex-Eskom chair denies chief state capture specialist…, Why Steinhoff skelm Markus Jooste, former CEO, is a…, Eskom: Optimum received R1,8bn prepayment on coal…, Gupta tales: How controversial family scored…, Covid-19 takes SA theatre doyenne Dawn Lindberg, © 2020 BizNews, Inc. | The Rational Perspective. Picture: GCIS, Zondo concludes hearings for the year, but nowhere near end of witness list, Come forward or face the music, Gordhan warns co’s in dodgy dealings with SOEs, Power cuts return as Eskom announces stage 2 load shedding for the weekend, ‘Zola Tsotsi wanted to get rid of me’, Koko tells Zondo Commission, Eskom to continue working with ABB despite admission of irregular contract, With system constrained, Eskom urges South Africans to reduce electricity usage, Ramaphosa to address nation tomorrow evening, EC Premier Mabuyane closes all beaches in province during festive season. The utility’s 484 billion rand ($31 billion) of debt was once called South Africa’s biggest economic risk by Goldman Sachs Group Inc. “Innovative ideas are … Subscribe to our Newsletter to get daily updates on local affairs, with a global context. Nov.19 — South African President Cyril Ramaphosa says the government is committed to reining in its stretched finances and will avoid a sovereign debt crisis. © 2020 BizNews, Inc. | The Rational PerspectiveTerms & ConditionsComments Policy. This is bad news for everyday South Africans. Mboweni: We cannot allow SA to move towards a sovereign debt crisis, Finance Minister Tito Mboweni delivers his Medium-Term Budget Policy Speech in Parliament on 28 October 2020 in Cape Town. South Africa is now ranked 60th in the World Economic Forum’s rankings and 84th on the Ease of Doing Business ranking. South Africa led the way for such borrowing in 1995, but since the global financial crisis in 2008, issuance has surged from neighbouring nations. Treasury documents released with the MTBPS reveal how debt service costs are now 4.8% of GDP, up from 3.3% in 2016. Greek civil servants and pensioners had their salaries and pensions slashed. CAPE TOWN - Finance Minister Tito Mboweni has presented the Medium-Term Budget Policy Statement (MTBPS) against the backdrop of growing national debt and an economy decimated by the COVID-19 pandemic. JOHANNESBURG - Finance Minister, Tito Mboweni has again flagged a potential sovereign debt crisis in South Africa. One of the major problems of the Greek crisis is that the solvency of the Greek banking system and the solvency of the Greek state are so tightly linked. Finance Minister Tito Mboweni has sounded a fresh warning that South Africa could land up in a sovereign debt crisis within three years if government debt is not reined in. The Minister made the declaration during... Jump to. • READ: Tito Mboweni’s Medium-Term Budget Policy Statement. On addressing this Mboweni has made a number of suggestions and fiscal measures to narrow the budget deficit and stabilise debt over the next five years. 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