Sfiso Buthelezi: We want to avoid IMF bailout at all cost

2017-10-29 11:22 - Justin Brown
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Deputy Finance Minister Sfiso Buthelezi. (Photo: Gallo Images) ~ Gallo Images

Johannesburg - The South African government does not want to be forced to approach the International Monetary Fund (IMF) for a bailout at any time in the future, says Deputy Finance Minister Sfiso Buthelezi.

“We do not want to go there ... Once you get there, it is very difficult to get out,” he told City Press during an interview after Wednesday’s tabling of the Medium-term Budget Policy Statement.

“We South Africans jealously guard our sovereignty. We do not want to go to any funder, having lost our sovereignty. We do not want to be a burden to be saved. Let’s save ourselves.”

The policy statement warns that gross national debt is projected to continue rising, breaching 60% of GDP by 2022.

Such a level is seen as perilous when it comes to government finances – and should debt levels reach between 65% and 70% of GDP, it could result in the government being forced to seek help from the IMF.

“We need to change course very drastically,” said Buthelezi, adding that state-owned enterprises (SOEs) required a “proper mix of skills” at board level. “For a long time at SAA, there hasn’t been a CEO.”

However, from November 1, Vodacom executive Vuyani Jarana will take up his post as CEO of the beleaguered state airline.

Buthelezi said it was crucial for SAA to bring a strategic equity partner on board.

Regarding economic growth, he said that even with “the best of intentions”, government could not get the economy growing on its own.

“Growth is the responsibility of all of us.”

Referring to a “red light” at Eskom, Buthelezi said: “We are exposed as far as the guarantees are concerned.” National Treasury has issued Eskom with R350 billion in guarantees.

Buthelezi said government was tired of bailing out SOEs, especially when the bailouts were for consumption rather than capital expenditure.

He emphasised that this week’s mini budget had taken place in a “very challenging environment”.

“The economy is not growing. Obviously, we have challenging revenues,” he concluded.

* Visit our Mini Budget Special Issue for all the news, views and analysis.

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