South Africa ‘on verge of failing because of public resources raids’

10 May 18

Looting of public resources has left South Africa on the brink of becoming a failed state, according to the Treasury’s director general.

Dondo Mogajane hit out at public servants who he said were turning a blind eye to the plunder of state resources, addressing a public financial management conference. 

“We are not a failed state, but we are on the verge of becoming a failed state – and we were party to that,” Mogajane said.

“Investors, lenders, people who buy our bonds were not interested. And credit rating agencies downgraded us left, right and centre, and you saw the impact of failed governance.”

He said the entire public sector needed to improve its governance and he laid down a challenge to public servants to help rebuild trust in South Africa’s institutions.

In February, the South African government announced a suite of measures to help bring spending under control.

The government wants to reduce the budget deficit from 4.1% to 3.5% and bring debt down to 52% of gross domestic product.

Among the fiscal measures announced is the first increase in value added tax in 25 years.

“Tax revenue faces challenges from both the economy and from tax administration,” Mogajane said.

“Raising R60bn in one year is going to be a tall order.”

Deputy finance minister Mondli Gungubele, spoke at the same event saying South Africa “dare not relax” if public finances are to be put on a sustainable footing.

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