Sunday, June 1, 2025
LBNN
  • Business
  • Markets
  • Politics
  • Crypto
  • Finance
  • Energy
  • Technology
  • Taxes
  • Creator Economy
  • Wealth Management
  • Documentaries
No Result
View All Result
LBNN

Godongwana says new rules key to mend finances

Simon Osuji by Simon Osuji
March 5, 2024
in Finance
0
Godongwana says new rules key to mend finances
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter

South Africa’s finance minister said introducing fiscal rules make sense, as stagnant economic growth due to incessant power cuts and logistical constraints are hindering efforts to rein in swelling debt.

Finance Minister Enoch Godongwana announced plans to introduce a binding fiscal anchor in the year ahead when he tabled South Africa’s budget last month, in order to provide a sustainable long-term path for public finances.

South Africans need to discuss that given “our debt servicing costs are rising enormously, is there a scope of saying let’s try and reduce” the debt to gross domestic product ratio and lower debt service costs, Godongwana said in an interview with Bloomberg in Sao Paulo on the sidelines of a Group of 20 meeting of finance chiefs and central bank governors last week.

ADVERTISEMENT

CONTINUE READING BELOW

The country’s debt-to-GDP ratio which stood at about 24% in 2008 is expected to peak at 75.3% in 2025-26, down from 77.7% estimated by National Treasury in November.

The improved outlook is partly due to plans by the government to tap a portion of the funds in the country’s Gold and Foreign Exchange Contingency Reserve Account held at the central bank to pay down its debt. GFECRA will be restructured to free up R150 billion ($7.9 billion) over three years.

Still, while the move was largely welcomed by markets, it’s viewed as a short-term fix unlike stronger economic growth.

“Our major challenge” to lowering the debt-to-GDP ratio is a growth issue, Godongwana said, which is compounded by a murky outlook for the country’s electricity and the logistics sector. “They pose a major risk,” he said.

The annual economic growth rate of Africa’s most industrialised nation in the past decade has averaged less that 1% because of endemic corruption and constraints at its power, port and rail operators.

Godongwana has previously said that for the fiscal anchor to become binding it will need political buy in.

© 2024 Bloomberg



Source link

Related posts

What Sidi Ould Tah seeks to achieve as AfDB’s new president

What Sidi Ould Tah seeks to achieve as AfDB’s new president

May 30, 2025
Why smart capital deployment is key in Africa’s growth

Why smart capital deployment is key in Africa’s growth

May 29, 2025
Previous Post

Football has no boundaries, message from fans

Next Post

BRICS Confirms New Countries Will Join Alliance in 2024

Next Post
BRICS Confirms New Countries Will Join Alliance in 2024

BRICS Confirms New Countries Will Join Alliance in 2024

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

How to Renew Your US Passport Online

How to Renew Your US Passport Online

11 months ago
General Atomics to Advance Its Long Range Maneuvering Projectile for US Navy

General Atomics to Advance Its Long Range Maneuvering Projectile for US Navy

6 months ago
Change Your Thoughts and Change Your Destiny in the Healing Circle

Change Your Thoughts and Change Your Destiny in the Healing Circle

1 year ago
Vinpearl’s Blend of Nature and Luxury

Vinpearl’s Blend of Nature and Luxury

9 months ago

POPULAR NEWS

  • Ghana to build three oil refineries, five petrochemical plants in energy sector overhaul

    Ghana to build three oil refineries, five petrochemical plants in energy sector overhaul

    0 shares
    Share 0 Tweet 0
  • When Will SHIB Reach $1? Here’s What ChatGPT Says

    0 shares
    Share 0 Tweet 0
  • Matthew Slater, son of Jackson State great, happy to see HBCUs back at the forefront

    0 shares
    Share 0 Tweet 0
  • Dolly Varden Focuses on Adding Ounces the Remainder of 2023

    0 shares
    Share 0 Tweet 0
  • US Dollar Might Fall To 96-97 Range in March 2024

    0 shares
    Share 0 Tweet 0
  • Privacy Policy
  • Contact

© 2023 LBNN - All rights reserved.

No Result
View All Result
  • Home
  • Business
  • Politics
  • Markets
  • Crypto
  • Economics
    • Manufacturing
    • Real Estate
    • Infrastructure
  • Finance
  • Energy
  • Creator Economy
  • Wealth Management
  • Taxes
  • Telecoms
  • Military & Defense
  • Careers
  • Technology
  • Artificial Intelligence
  • Investigative journalism
  • Art & Culture
  • Documentaries
  • Quizzes
    • Enneagram quiz
  • Newsletters
    • LBNN Newsletter
    • Divergent Capitalist

© 2023 LBNN - All rights reserved.