The Sarb raised interest rates, keeping in step with attempts by Turkey and other emerging market economies to shore up their currencies. (Shutterstock) ~ Shutterstock
Cape Town - It is too late for South Africa to prevent national debt reaching 44% of GDP within the next two years, finance director general Lungisa Fuzile said on Thursday.
"We are too close to 2016," he said after a Treasury briefing to Parliament's select committee on finance, a day after Minister Pravin Gordhan tabled the 2014 National Budget speech.
He told MPs that Treasury did not set debt ceilings, but sought to contain debt by stimulating the economy with specific interventions designed to speed up growth.
"Debt as a percentage of GDP is not something we target."
He said Treasury believed the necessary steps to achieve this included addressing the electricity generation shortfall and cutting red tape hampering the mining sector.
He said government was aware that it was now imperative to "do the things set out in the NDP" (National Development Plan) and to "deal with some of the regulatory impediments to growth" notably by streamlining applications for mining licences.
"If you get that right and several other things that trigger growth then you get a bigger GDP, your denominator favours you in terms of that 44 percent, you get bigger revenues which means you borrow less," he said.
"At the heart of this is us as a country being able to achieve growth and we have a plan for it. It is beginning now to translate into some granular stuff closer to the ground... and we are confident that we will achieve this."
National debt had risen from a low of 27.3% of GDP in 2008/09 to 41.8% in 2012/13.
Finance Minister Pravin Gordhan said he hoped that his budget speech had settled any questions about government's commitment to implement the NDP.
He reiterated that the black population remained too excluded from the economy.
"Black participation in our economy is too limited, it needs to increase, and we need to all make efforts to increase entrepreneurship in our society, the number of small businesses in our society, increase competition in our society, but most importantly make our economy more agile to seize opportunities that are before us."