Challenges in public debt management in South Africa

Abstract: Public debt is often a country’s largest liability; this is predominantly true in developing countries, where a significant amount of national revenue is used in repaying such debt. It is evident that public debt is a major concern in South Africa, especially with the slow economic growth rate being experienced and the high rate of unemployment. It is important that public debt is managed in an appropriate, effective and efficient manner. This involves the crucial role of the National Treasury and it being equipped with knowledgeable and skilled personnel, having strict adherence and insight into financial legislation; as well as ensuring proper control and accountability. According to the Public Finance Management Act 29 of 1999, the National Treasury was established to ensure control and appropriate financial management at both national and provincial government. The National Treasury is responsible for control over all the assets, revenue, expenditure and liabilities of government. However, in order to achieve this, challenges can be experienced by the National Treasury and if not dealt with appropriately may cause a country to fall into recession or even worse, bankruptcy. In light of the above, this article seeks to explore the challenges experienced by the South African government in the management of its public debt. It will also consider measures/methodologies that can be identified when addressing these challenges. Specifically emphasis is placed on the role of the National Treasury in this regard