JOHANNESBURG Aug 21 (Reuters) – Despite rising debt levels
and increased social spending, South Africa is on a sustainable
fiscal path, Deputy Finance Minister Nhlanhla Nene said in a
speech sent by email on Tuesday.
Social expenditures, which include assistance grants and
health and education spending, account for 58 percent of
government expenditures, compared to 49 percent 10 years ago.
The number of social grant beneficiaries reached 15.6 million in
March 2012, Nene said.
“Preliminary indications are that the trajectory of social
spending as it currently stands in the budget is sustainable,”
he said.
Ratings agency Standard Poor’s told Reuters on Monday they
were concerned about the country’s trajectory of rising debt.
“At the moment as far as the debt dynamics are concerned on
the government side, we are still moving in the wrong
direction,” said Konrad Reuss, managing director of Sub-Saharan
Africa at Standard and Poor’s.
Deputy Finance Minister Nene said South Africa needs to
stabilise the growth of the country’s debt, which stands at
about 35 percent of gross domestic product.
He reiterated that the growing government wage bill was of
great concern since it is the second-fastest growing component
of spending.
“This would not be a problem if productivity of public
officials was also rising strongly, but we know that government
falls short on many fronts where service delivery is concerned”.
(Reporting by Xola Potelwa; Editing by Jon Herskovitz)
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