In a high‑level technical assistance report released, the IMF said SA’s public debt has risen at one of the fastest rates among emerging markets over the past decade, exceeding 75% of gross domestic product (GDP) by 2025. Debt‑servicing costs now absorb around one‑fifth of government revenues, well above the average for sub‑Saharan Africa, limiting room for investment in public services and infrastructure.

The IMF worked closely with the National Treasury to develop proposals aimed at stabilising debt, rebuilding fiscal buffers and improving confidence among investors. Central to the recommendations is the adoption of a clear debt anchor, with an interim target of reducing debt to around 70% of GDP by the early 2030s, followed by a longer‑term goal of 60% of GDP.

To support this, the Fund advised introducing numerical fiscal rules, particularly limits on real expenditure growth, alongside a stronger primary balance until debt reduction targets are achieved. More than 100 countries globally now use such rules to improve transparency, discipline and accountability.

The IMF also recommended putting a principles‑based fiscal framework into law, supported by a publicly articulated fiscal strategy covering the government’s term of office. An independent fiscal institution should report to Parliament on compliance, strengthening oversight and credibility.

Recognising SA’s exposure to economic shocks, the report supports the inclusion of well‑defined escape clauses in fiscal rules. These would allow temporary deviations during exceptional circumstances, subject to parliamentary approval and a clear plan to return to compliance.

The IMF cautioned that without decisive action, future shocks, particularly from state‑owned enterprises, could push debt onto an unsustainable trajectory. Strengthening fiscal risk management and long‑term forecasting, it said, is essential for safeguarding growth and protecting frontline services.

–IMF/ChannelAfrica–