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South Africa’s debt-service cost (interest payments) has risen at an annual average rate of about 13.1% ‒ reaching R385.6 billion in fiscal 2024/25.
As a percentage of gross domestic product (GDP), debt-service cost has risen from 2% in fiscal 2008/09 to over 5% in fiscal 2024/25.
Since 2008, debt-service cost as a share of total consolidated government spending has more than doubled.
The cost of servicing debt is rising faster than spending on any other government service ‒ meaning repaying the debt-service cost is taking up a bigger slice of the national budget.
Debt-service cost as a share of total government spending now exceeds individual spending on health, economic affairs and housing.
In 2024, about 75% of South Africa’s domestic government debt was held by local investors ‒ up from 60% in 2018.
This shows that foreign investors have pulled back, worried about the risks in our economy.
Because investors see more risk, they demand higher returns, making it more expensive for government to borrow.
To manage debt, National Treasury plans to introduce fiscal rules to strengthen policy and support economic stability.
When combined with structural reforms, these rules will help promote inclusive growth and a more stable approach to managing public finances.
