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The SA government, which is being forced to sell ever more debt than planned because it’s spending more than it makes, is unlikely to reverse this spiral any time soon - especially not ahead of an election, economists say.
It emerged in the medium-term budget that over the next three years, the state will have to borrow more, issuing debt at an average of R552.7 billion a year to finance the widening gap between expenditure and tax collection, to refinance maturing bonds and to fund the Eskom debt-relief arrangement.
A combination of treasury bills (short-term debt instruments), Sukuk (Sharia-compliant or Islamic bonds), debt and floating-rate notes will likely fill the shortfall, according to bond manager Futuregrowth.
