South Africa is planning to borrow more money to better deal with the weak tax revenues this year, the finance minister Tito Mboweni (photo) said.
He said tax revenues for FY2019-20 could be way below what was expected. This situation, combined with the growing spending incurred by power utility Eskom, to which the State has just granted $4.2 billion in assistance, should considerably increase the government's borrowing needs.
This new aid to Eskom comes at a time when the company's growth is slowing down making it unable to repay its debt. Also, South Africa's economy has been slowing for several months, with growth projected at only 1.2% for this year, compared to an estimate of 0.8% last year.
According to Minister Mboweni, the government will have to revise its financing strategy and weekly bond issues to higher levels than expected.
Moutiou Adjibi Nourou