Increasing debt a red flag for economy, says Cosatu

IOL News reports that The Congress of South African Trade Unions (Cosatu) is warning the government to fix the economy before the budget in February next year, to avoid being forced to go to the International Monetary Fund (IMF) with cap in hand. The trade union federation on Friday said the economy deteriorated in the last few months and going to the IMF remained a possibility and that would lead the country to surrender sovereignty.

This comes as civil society organisations complained about hundreds of millions of rand in under-expenditure in government departments. Cosatu and civil society organisations were presenting to the appropriations committee on the mini budget tabled by Finance Minister Tito Mboweni in October. Matthew Parks of Cosatu said the debt was sky-rocketing and the government was unable to control it. The debt is approaching 70% of the Gross Domestic Product (GDP). Mboweni warned that in order for debt to be manageable it had to be below 30% of the GDP. But in South Africa it was R3trillion at the moment and would rise higher in the next two years. Parks said the government needed to get the economy right. “We view the debt crisis as extremely dangerous. “It puts our sovereignty in crisis.

by Siyabonga Mkhwanazi

Releated

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