SA treasury to seek spending cuts, Sunday Times says

South Africa’s National Treasury will propose a freeze on new public service jobs and procurement contracts for all infrastructure projects to check “runaway” government spending, the Sunday Times reported.

The proposals for “radical measures” were prepared after a cabinet meeting in mid-August at which ministers were warned of dwindling tax revenue, the newspaper said, citing a Treasury document.

The national debt has risen to R4.7 trillion ($250 billion) and could reach R6 trillion in 2025, compared with R500 billion in 2006, according to the Johannesburg-based newspaper.

While the National Treasury has warned the government to brace for a tough time when the finance minister delivers a medium-term budget policy statement in October, President Cyril Ramaphosa said on Saturday that lower spending is “not necessarily” the answer to South Africa’s fiscal challenges.

South Africa last experienced budget tightening measures about a decade ago to shake off the effects of the global financial crisis, the Sunday Times said.