Download the EWN app to your iOS or Android device. JOHANNESBURG - Finance Minister, Tito Mboweni has again flagged a potential sovereign debt crisis in South Africa. Subscribe to our Newsletter to get daily updates on local affairs, with a global context. If that happens, an IMF bailout will beckon. Like many of its emerging market peers, SA is looking down the barrel of a sovereign debt crisis, which is what we call it when a country can’t pay its debts and can’t borrow more to keep paying them. “We must be careful to avoid the fate of countries like Argentina and Ecuador that defaulted on their debt … Everything from investing like Warren Buffett to the Audiobiography of Cyril Ramaphosa. Amid falling prices of raw materials, recession, and now COVID-19, Africa is in serious trouble as debt burden grows. This is compared to an estimate of R3.56 trillion or 65.6% of GDP projected in February. South Africa’s government is committed to reining in its debt and will avoid a sovereign debt crisis, President Cyril Ramaphosa said. [1] The previous debt crisis of the 1990s is still fresh. He was referring to the country facing a sovereign debt crisis, which is when a country can no longer pay back the interest or principal on its borrowings. The South African banking system, by contrast, is robust and well capitalized. “It’s a bit too early to call it a sovereign-debt crisis. Concern is increasing about the prospect of a new sovereign debt crisis in countries across sub-Saharan Africa. South Africa is faced with two gates – a broad gate to bankruptcy and a narrow gate to prosperity. Mboweni: We cannot allow SA to move towards a sovereign debt crisis, Finance Minister Tito Mboweni delivers his Medium-Term Budget Policy Speech in Parliament on 28 October 2020 in Cape Town. 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It … Nov.19 — South African President Cyril Ramaphosa says the government is committed to reining in its stretched finances and will avoid a sovereign debt crisis. ... Mboweni said the bulk of government bonds is held by domestic banks, and in the event of a sovereign debt crisis, that would result in a banking crisis. The world is changing fast and to keep up you need local knowledge with global context. The country’s debt has been rising as a proportion of the nation’s GDP for some years. © 2020 BizNews, Inc. | The Rational PerspectiveTerms & ConditionsComments Policy. Mboweni warns against country's debt crisis Wednesday, November 25, 2020 Finance Minister Tito Mboweni has warned that South Africa must find means to control its debt crisis urgently. Addressing parliament on Wednesday, Mboweni said the country had to take action to avoid a sovereign debt crisis. 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