Ferial Haffajee
South Africa’s biggest non-governmental organisations (NGOs) have launched a campaign to push for the restructuring of apartheid debt. Led by the NGO Coalition, they want to egg government on to make changes to debt payments to free up revenue for development.
“There is real anxiety about the reconstruction and development programme among NGOs,” says the Coalition’s executive director Kumi Naidoo, adding that an analysis of public spending shows about one in five budget rands was paid on servicing debt – a total of R40-billion in the present financial year.
In the past eight years, public debt has grown from R80-billion in 1989 to R300- billion in 1996, due to the cost of retiring many civil servants, boosting reserves and the 1989/93 recession.
The coalition now wants government to get creative with its debt burden. Among the suggestions it made is an interest payment holiday, the restructuring of the government pension fund and partial debt forgiveness.
While the clarion call to “scrap apartheid debt” was common in the Eighties, the regular payment of the same debt has been crucial to help the new government gain credibility both locally and abroad.
The government has often voiced its intention to “pay back every cent”, though it is prepared to listen to the coalition’s proposals which are more nuanced and aimed instead at “minimising disruption on the financial markets”.