Running out of Road: South Africa's Public Finances and What is to be Done?

The two most important facts about the South African economy over the past decade are that growth has been exceptionally disappointing and this has been accompanied by a vast build-up of public sector debt. The two trends are linked: slow growth drove the rise in debt, which has now reached a point at which its weight is slowing growth. This report, drafted after considerable interaction with some of the country’s leading economists, describes the trajectory of government’s debt explosion, explains its causes, and sets out what we have to do to get out of this trap. It shows that the fiscal crisis has been driven by slow growth, and that growth needs to be accelerated to end it, but it shows also that unless we deal with the fiscal crisis, growth will not accelerate.