Public Management

S. Africa: Plans to rescue public companies could significantly worsen 2020 budget deficit

Monday, 21 October 2019 18:20
S. Africa: Plans to rescue public companies could significantly worsen 2020 budget deficit

(Ecofin Agency) - Plans elaborated by the South African government to rescue drowning public companies could significantly worsen the budget deficit forecasted for the FY 2020. According to a Bloomberg survey, budget deficit is expected to reach 6.1% next year, up the 4.5% the Treasury announced in February and more than the budget deficits recorded by the country since 2010.

Indeed the South African government made several cash injections into the power utility Eskom and the national airline South African Airways ; two struggling public companies which capture the lion’s share of budget resources at the expense of development projects. Over the next three years, for example, the government is expected to pump a total of 128 billion Rand ($8.6 billion) into the electricity company, which is facing a debt of more than $30 billion.

A worsening of the deficit could lead to an increase in public debt, threatening the country's finances. A few weeks earlier, the Institute of International Finance (IIF) reported that South Africa's public debt could rise to 95% of gross domestic product (GDP) within the next five years. This, while Finance Minister Tito Mboweni announced that the country would probably miss its 1.5% growth target in 2019 due to “changing conditions and many headwinds blowing through the national economy.”

As a reminder, the rating agencies Fitch and S&P Global Ratings classify the country's sovereign debt in the “junk” category (high risk), while Moody's keeps it in the investment grade category (low default risk). In the event of a deterioration in the public finance situation, the US agency could also lower its rating, worsening the investment prospects of Africa's most industrialized economy.

Moutiou Adjibi Nourou

Additional Info

  • communiques: Non
  • couleur: N/A
 
Finance


 
Telecom


Ecofin Agency covers the news from 9 business sectors in Africa: Public management, Finance, ICT, Agribusiness, Electricity, Mining, Oil and Gas, Comms and Laws. Ecofin Agency is also creating and management specialized medias, in paper and on the web/social networks, for institutions or African publishers.

AGENCE ECOFIN

Mediamania Sarl
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11

REDACTION
redaction@agenceecofin.com

Public management
Aaron AKINOCHO
Borgia KOBRI
Moutiou ADJIBI

Finance
Idriss LINGE
Walid KEFI
Chamberline MOKO

Agribusiness
Espoir OLODO

Electricity
Gwladys JOHNSON

Oil and Gas
Olivier DE SOUZA

Mining
Louis-Nino KANSOUN

ITC 
Muriel EDJO

Comms
Servan AHOUGNON

Cameroon
Brice R. MBODIAM
Sylvain ANDZONGO
Monique MAY
Julienne Rose SENDE

Togo
Fiacre E. KAKPO
Waliyullah TAJUDEEN
Séna AKODA

Niger
Sandrine GAINGNE

Gabon
Stephane BILLE
Pierre-Celestin ATANGANA

Desk
Stéphane ALIDJINOU
Souha TOURE
Vahid CODJIA
Diane ZODEHOUGAN
Hikmatu BILALI

Translation
Schadrac AKINOCHO
Mouka MEZONLIN
Firmine AÏZAN



Digital
Omar SOKHNA
Mamadou DIOP
Bacary MANE
Abdel Razak MOULIOM

Digital Marketing
Jérémie FLAUX
Geraud ACHI
Jean Christian BERNARD
Franck FOUTE

Web publishing
Bakoly RAHARISOA
Rina RAMANANDRAISOA
Hasina RAJEMISON

Development
Dominique FLAUX

 


 
REGIE COMMERCIALE
AGENCE ECOFIN
Rue du Léman, 6
1201 Genève
Tél: +41 22 301 96 11
Fax: +41 22 301 96 10

Benjamin FLAUX
bf@agenceecofin.com 
Tél: +41 22 301 96 11 
Mob: +41 78 699 13 72

Voir page 
Nos services
 

 










 



Ecofin Agency is a news agency for economic and sectorial information. It was created in 2010 and it website was launched in June 2011.

Please publish modules in offcanvas position.