South Africa's growing debt burden is escalating into a humanitarian disaster as the cost of servicing our interest bill is fast approaching R1 billion a day.
The steep rise in interest charges has diverted vast amounts of resources away from schools, hospitals, the police, and other vital public services meant for the most vulnerable. Frontline workers are as a consequence forced to do more with less.
The depth of the impact of the public debt burden on the well-being of South Africans becomes clear when we consider how quickly it has ballooned relative to tepid economic growth and revenue shortfalls. In 2008, our debt-to-GDP ratio stabilised at a healthy 27%, which escalated to 74.1% in 2024. If all things remain equal, Treasury estimates that debt will stabilise at 75% by next year.
Research by the Wits Public Economy Project (PEP) indicate that Treasury is overly optimistic in its assessment of the outlook for the economy, and forecasts that public debt will rise to 80% of GDP by 2025.
What must Government do to course correct and stabilise our fiscal situation?
Currently Government allocates the largest share of its budget to the public wage bill, largely to the benefit of high-ranking bureaucrats. There are nearly 38,000 workers who earn over one million Rand annually. The number of public officials in this pay bracket has surged by almost 300% since 2014.