Cape Town – Reports of a proposed bailout for parastatals by Cabinet, especially the South African National Roads Agency (Sanral), will worsen South Africa’s precarious debt levels and negatively impact the country’s national sovereign ratings, the Democratic Alliance said on Sunday.
“Cabinet’s argument that a Sanral default will affect sovereign ratings is flawed because a government guarantee of R59 billion will increase the state’s debt liabilities to 60 percent of GDP, which is sure to induce a sovereign credit downgrade,” DA spokesman Alf Lees said.
“It is somewhat surprising that the report seems to ignore the other elephant in the room – the contingent liability in the form of Eskom debt and government guarantees that, according to the Eskom corporate plan, will increase from R235 billion To R600 billion over the next three years.”
Lees said he would ask the chairman of parliament’s finance standing committee (SCOF) Yunus Carrim to urgently call the Fiscal Liability Committee and the Asset and Liability Management Unit of the National Treasury to address the committee on the full extent of sovereign liabilities, contingent liabilities, and current applications for government guarantees and cash bailouts.
African News Agency/ANA