R1.1 billion a day: How South Africans foot government’s growing debt
The government is spending a staggering R1.1 billion every day just to service its deb
Image: GCIS
The government is spending a staggering R1.1 billion every day just to service its debt, but insists the country is not on the brink of a financial crisis.
Responding to a parliamentary question posed by uMkhonto weSizwe MP Adil Nchabeleng, Finance Minister Enoch Godongwana said debt-servicing costs for the 2025/26 fiscal year are projected at R421.5 billion.
"The National Treasury recognises the pressure that rising debt-service costs place on the fiscus and has implemented measures to ensure that debt-service costs do not continue to crowd out spending on core spending priorities," Godongwana said.
"As shown in the 2025 Medium-Term Budget Policy Statement (MTBPS), over the medium term, debt-service costs amount to R1.36 trillion and grow at a slower pace of 3.8 percent".
He added that the government has taken steps to reduce borrowing costs, including issuing two new floating-rate notes, which brought the overall borrowing cost down from 8.3% in March 2025 to 7.6% in October 2025.
Godongwana said that careful debt management, such as diversifying funding instruments, extending debt maturities, and managing, is helping to ensure that debt remains sustainable.
"The 2025 MTBPS outlines a spending framework that allocates R4.2 trillion to the social wage over the medium term, including social protection, education, health and community development.
"In 2025/26 alone, R1.3 trillion is directed to these priorities, while R421.5 billion will go to debt-service costs. In this regard, the fiscal strategy that the National Treasury has been implementing in recent years has borne fruit, because debt-service costs will stabilise as a proportion of both GDP and the overall budget, freeing up more resources for service delivery".
He said this is "evident from the medium-term budget figures, which show funding for economic development, health, and learning and culture all growing faster than debt-service costs".
"The debt portfolio remains sensitive to movements in key market variables. For instance, a 1 percentage point increase in short- and long-term interest rates is estimated to raise gross loan debt by R12.3 billion and annual debt-service costs by R7.8 billion. These sensitivities highlight the importance of a credible fiscal framework and prudent debt management to ensure that debt remains sustainable."
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