Eish! South Africa’s national debt now averages more than R55 000 for every living citizen. But who has racked up the numbers, and where does it go?
Is there any better summary for South Africa’s woes than a giant ticking clock on a bleak background?
The “debt clock” – monitored and calculated by currency specialists commodity.com – is adding up all the interest payments South Africa owes, in a second-by-second breakdown.
The hypnotic, if not utterly perturbing counter has taken its data from the yearly budget forecast announced by the Treasury last month. It takes into account the interest payments owed by Mzansi on an annual basis and breaks it down into excruciating detail: The facts and figures provided by the debt clock are somewhat hair-raising.
How much debt does South Africa have?
- Interest payments per year: R172.8 billion
- Interest payments per second: R5 479.
- National debt as of Tuesday 19 March: 3.046 trillion.
- Population of South Africa: About 54.5 million.
- National debt per citizen: R55 897.
- South Africa’s GDP: R5.4 trillion.
- Debt as a percentage of GDP: 56.1%.
Things aren’t going to get much brighter any time soon. With the country practically haemorrhaging R5 500 each second, that’s pushed up the Treasury’s forecast for net loan debt up even further.
An additional R400 billion is expected to be lumped onto our debt tab by 2022. In fact, the Treasury’s Budget Review for 2019 isn’t an easy read, as they estimate:
- Net loan debt will reach R3.5 trillion or 55.5% of GDP by 2021.
- Total net debt will only stabilise at 57.3% in 2024/25.
- Government’s gross loan debts reached an estimated R2.81 trillion or 55.6% of GDP in 2018.
How much owed money our government institutions are responsible for
Our SOE’s are said to be nearing the R400 billion mark for the total debt owed. A large portion of that belongs to Eskom, who’s own personal arrears are projected to break that figure alone over the next few years.
Financial institutions – including banks and building societies – account for R133.2 billion of government debt. But then we move on to our “non-commercial public entities.”
These are all the organisations that are funded by the government in a non-profit capacity: Institutions like medical research teams, national libraries/museums and even the National Lottery Commission are all funded by the state. There are 162 separate entities in total, explaining their large chunk of the bill:
Branch Debt owed after 2018
State-owned companies +R368.3 billion
Development finance institutions +R133.2 billion
Social Security funds -R26.2 billion
Non-commercial public entities +714.8 billion
TOTAL +R1.19 trillon
Local debts remain a problem
The Treasury also report that local municipalities are falling behind rapidly with the payments they owe. Their official document says that regional governance “has deteriorated”, meaning the national branches now have to step in to keep these municipalities sustainable:
“Provinces continue to balance rising costs and growing demand for services within tight budgets. Sound financial management by provincial treasuries, and national interventions where necessary have ensured that provincial finances remain sustainable.”
“Financial management in local government has deteriorated, as reflected in the widespread adoption of unfunded budgets across all types of municipalities. The national government has stepped up its commitment to assist with a series of remedial actions.”
National Treasury Budget Review 2019