IMF calls for deep spending reforms amidst SA rising debt

International financial institution issues warning over spiraling state public money spending

- SIPHELELE DLUDLA

THE IMF warning on Wednesday follows discussions with the government officials on economic developments and policies and comes ahead of the Minister of Finance tabling the 2026 National Budget later this month.

(ARMAND HOUGH Independent Newspapers)

THE International Monetary Fund (IMF) has warned that South Africa must urgently overhaul how it spends public money, from the public wage bill and State-Owned Enterprises (SOEs) to procurement systems and social transfers, if it is to stabilise debt and restore fiscal sustainability.

The IMF warning on Wednesday follows discussions with the government officials on economic developments and policies and comes ahead of the Minister of Finance tabling the 2026 National Budget later this month.

In its 2025 Article IV Consultation, concluded this week, the IMF said though Africa's most industrialised economy has managed to weather renewed global turbulence marked by rising protectionism, trade fragmentation and heightened policy uncertainty, longstanding structural constraints and mounting debt continue to weigh on the country’s prospects.

Although the government has reaffirmed its commitment to debt stabili-sation and is targeting a 1.5% of GDP primary surplus from the 2026 fiscal year, the IMF projects that, under current policies, public debt will remain high over the medium term, leaving the country vulnerable to external shocks and rising borrowing costs.