WORLDVIEW: SA has a debt problem. But so does everyone else.
In his recent contribution, Magnus Heystek rightly points out that SA has a serious debt problem. His analysis β essentially, that the government has been spending more than it takes in, that many state-owned enterprises are over-indebted and in a bad way, and that economic growth has underperformed for several years β is largely uncontroversial. Tito Mboweni said as much in his medium-term budget speech.
The best path forward is also fairly clear. We know more or less what the IMF would demand in the event of a bailout, which is broadly in line with what Mboweni and president Cyril Ramaphosa have proposed. The big question mark, as Heystek correctly points out, is whether there is sufficient political will within the ANC to make the necessary changes before a full-blown crisis forces the country's hand.
To me, however, what is missing in Heystek's analysis is a global perspective. Because SA is not the only country that has found its way into unsustainable debt and it's also not the only country facing a set of very tough choices.
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