CAPE TOWN (Reuters) -South Africa plans to raise around 630 billion rand ($41 billion) in global markets this year, Finance Minister Enoch Godongwana told lawmakers on Tuesday.
Godongwana made the remarks as he briefed the lawmakers on a recent 11 billion rand World Bank loan granted last month to help protect the poor and bolster a weak economy pummelled by four waves of the global pandemic.
“This year we are likely to raise 630 billion rand, so if (you) look at 11 billion rand in the scheme of things, it is small,” he said.
Asked about potentially strict conditions attached to the loan that could harm South Africa’s economic prospects, Godongwana there were none.
“Are there conditions attached? To my knowledge, no,” he said of the comparatively cheaper loan that also afforded South Africa a repayment holiday for the first three years.
Godongwana said unless South Africa, whose debt-to-GDP ratio is hovering around a historically high 80%, managed to urgently solve its debt malaise the country could struggle to meet its repayment obligations in future.
“Are we likely to meet our obligations? The answer is yes and no. Yes, for now, that is what we are going to be telling you on the 23rd, but … if we don’t change the debt trajectory, we may not be able to solve those obligations,” Godongwana said.
Godongwana presents his maiden national budget to parliament on Feb. 23.
($1 = 15.3138 rand)
(Reporting by Wendell RoelfEditing by Mark Potter)
