• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

South Africa taps gold, reserves to curb runaway debt

1 year ago
in Business, Economy, Features, highlights, Home, home-news, latest News
2 min read
0 0
0
72
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

South Africa taps gold, reserves to curb runaway debt

South Africa’s cash-strapped Finance Minister Enoch Godongwana tapped the country’s gold and foreign-exchange reserves to steady its eye-watering debt, while boosting spending on teachers, nurses and welfare in a critical election year.

In his last budget before the May 29 vote, in which the ruling African National Congress risks losing its national majority for the first time since 1994, Godongwana will restructure reserves held at the central bank to free up 150 billion rand ($7.9 billion) over three years.

The account, known as the Gold and Foreign Exchange Contingency Reserve Account, showed paper profits of 507.3 billion rand as of last month — a massive increase from the 1.8 billion rand in 2006 that reflects the South African currency’s slump in value against the dollar.

Technically, 250 billion rand will be withdrawn from GFECRA. But 100 billion rand will be allocated to protect the central bank’s balance sheet from losses, although it will be returned to the government over time as the central bank generates its own buffer. The remaining 250 billion rand will still be earmarked to shield the country’s reserves from currency losses.

The design is aimed at reassuring investors that the funds are being used wisely and that the reserves wouldn’t be plundered for voter-pleasing budget giveaways.

Central bank Governor Lesetja Kganyago told reporters ahead of the budget speech on Wednesday that the actual reserves wouldn’t be sold to raise the funds for Treasury. Rather, the central bank will create a new liability which it will then need to service.

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

The move will immediately ease pressure on South Africa’s precarious public finances and avoid a debt blowout.

Debt Peak

The Treasury sees debt-service costs declining by 30 billion rand over the medium term as a result. Debt as a share of the overall economy is now seen peaking at 75.3% in 2025/26, down from 77.7% estimated in November, it said.

Use of the funds will be earmarked to tackle debt and borrowing, guided by a framework still being hammered out with the central bank to prevent ad-hoc decisions and ensure transparency.

Tapping the reserves helps President Cyril Ramaphosa project a measure of fiscal probity while avoiding cuts to popular spending programs in an election year.

Opinion polls show support for the ANC dipping below 50%, which would force it to form a coalition with smaller parties to remain in power.

The budget allocates 33.6 billion rand toward funding contentious 350-rand monthly stipends that were introduced as a temporary measure to cushion the vulnerable from the fallout of the coronavirus pandemic. Godongwana, who previously committed to an extension until March 2025, made provisional allocations for it for two more years, pending a decision on how it would be funded. It allotted 35.1 billion rand and 36.7 billion rand for the 2026 and 2027 financial years, respectively.

Ramaphosa last month said there is a case for the grant to be made permanent, even with South Africa’s fiscal risks, stressing a complete overhaul of the country’s social welfare system is needed.

No additional money was set aside to help troubled state logistics company Transnet SOC. Ltd. or to fund a national health insurance plan.

Source: bloomberg
Via: norvanreports
Tags: Goldreservesreserves to curb runaway debtSouth AfricaSouth Africa taps gold
No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.