South Africa is taking on more debt to fund critical infrastructure projects
South Africa is taking on more debt to fund critical infrastructure projects, while billions of rand continue to be spent every year servicing existing loans.
The latest borrowing, a $1.5 billion (about R24.7 billion) loan from the World Bank, is aimed at supporting reforms in key sectors, including electricity, freight transport and water, with the hope of unlocking economic growth and creating jobs.
However, the funding comes against the backdrop of rising debt costs, with the government spending more than R1 billion a day servicing its existing debt.
Finance Minister Enoch Godongwana previously conceded that rising debt-service costs were putting pressure on the fiscus.
