Finance Minister Tito Mboweni
Finance Minister Tito Mboweni on Thursday warned that reprioritising spending was the only way for South Africa to avoid falling into a debt trap and losing autonomy over its finances.
Mboweni told a joint sitting of Parliament's standing and select committees on finance and appropriations the International Monetary Fund (IMF) would intervene if the national debt hit a ratio of 60 percent of GDP or higher.
"When that happens you are very close to having serious conversations with the IMF and they are going to come and take over your finances, and we don't want to go there," Mboweni said.
"Let's try and do all we can to avoid that situation."
According to National Treasury's medium-term budget policy statement (MTBPS) tabled on Wednesday, debt is expected to stabilise at 59.6 percent of GDP in 2023/24.
Mboweni noted that the markets may not have liked the bleak picture his MTBPS speech gave of the economy, with growth projections adjusted downwards to 0.7 percent for the current financial year.
"We can't spin our way out of the numbers and we have to tell it like it is," he said.