South Africa is looking at options to retire a multi-billion rand debt incurred by the state road agency for highway upgrades, after a court halted a planned road toll to recoup the money, Finance Minister Pravin Gordhan said on Friday.
The Treasury may have to pay for the entire 20 billion rand ($2.50 billion) debt, well above the 5.6 billion rand budgeted for in February, after the country's main labour federation launched a court challenge against road agency SANRAL's plans to raise the balance through tolls.
The government has appointed a committee chaired by the deputy president to try and resolve the stand-off.
Asked if the stalled tolling would have implications for the budget, Gordhan told reporters: “No, no we'll manage this.”
“We have many options and that's why cabinet appointed this committee ... Some work has already happened and we meet early next week...,” he said at the sidelines of the World Economic Forum for Africa in Ethiopia.
Gordhan urged European countries to work together to resolve debt problems which have fuelled risk aversion, triggering frequent waves of portfolio flows out of emerging markets and creating volatility for currencies such as South Africa's rand .
“The kind of generalised approach that we have taken until now is clearly recognised as inadequate ... Ultimately it's no individual country that's going to manage what some people call the tsunami of funds that fluctuate from one place to another,” Gordhan said. - Reuters