In a high\u2011level 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\u2011servicing costs now absorb around one\u2011fifth of government revenues, well above the average for sub\u2011Saharan Africa, limiting room for investment in public services and infrastructure.<\/p>\n
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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\u2011term goal of 60% of GDP.<\/p>\n
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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.<\/p>\n
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The IMF also recommended putting a principles\u2011based fiscal framework into law, supported by a publicly articulated fiscal strategy covering the government\u2019s term of office. An independent fiscal institution should report to Parliament on compliance, strengthening oversight and credibility.<\/p>\n
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Recognising SA\u2019s exposure to economic shocks, the report supports the inclusion of well\u2011defined 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.<\/p>\n
<\/p>\n
The IMF cautioned that without decisive action, future shocks, particularly from state\u2011owned enterprises, could push debt onto an unsustainable trajectory. Strengthening fiscal risk management and long\u2011term forecasting, it said, is essential for safeguarding growth and protecting frontline services.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":30384,"template":"","meta":{"_acf_changed":false},"news-type":[44],"class_list":["post-30747","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"The International Monetary Fund (IMF) has urged South Africa (SA) to strengthen its fiscal framework to restore credibility and put public debt on a firm downward path, warning that rising debt levels risk crowding out essential social and development spending.","published_date":"","news_description":"The International Monetary Fund (IMF) has urged South Africa (SA) to strengthen its fiscal framework to restore credibility and put public debt on a firm downward path, warning that rising debt levels risk crowding out essential social and development spending.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30747\/revisions"}],"predecessor-version":[{"id":30748,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30747\/revisions\/30748"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/30384"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=30747"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=30747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}