South Africa to borrow $4.5bn on international markets over three years
Finance minister Pravin Gordhan said the South African economy is 'in crisis'.South Africa is planning to borrow $4.5 billion (€4 billion) from global markets over the next three years, with $1 billion outlined for the current fiscal year ending in March if conditions allow it, the National Treasury said on Wednesday (February 25th).
The Africa Report said the Treasury warned that perceptions of risks associated with lending or investing in South Africa had increased over the last few months, raising borrowing costs.
Debt service costs are therefore expected to rise by 15.3 billion rand (€890 million) over the next two years.
This announcement comes after the country's finance minister Pravin Gordhan said the South African economy is 'in crisis', the BBC reports.
He added that the economy was struggling with shrinking growth, 25 per cent unemployment, and widespread poverty.
Several rating agencies have threatened to downgrade South Africa to junk status, which would raise the country's borrowing costs even further.
Mr Gordhan unveiled government spending cuts, a civil service job freeze and some tax rises.