The United Nations Conference on Trade and Development (Unctad) has warned that debt in the world’s 59 poorest countries will prevent them from meeting their sustainable development goals (SDGs) by 2030.
Economist Michael Ade told FTW that this left South Africa in a vulnerable position.
“South Africa is part of a global value chain and the negative effects of over-indebtedness cannot be contained in the so-called 59 poorest countries only.”
He explained that the increasing debt levels and government deficits in most developing countries called for all countries to expand their tax bases to help shoulder the burden.
“In SA, the existing trade-off between developmental objectives and increasing debt levels puts the government in a difficult position. Moreover, the fact that government revenue seems to have tanked is of concern. The government finds itself in a situation whereby it has to continually service increasing debt levels, and increase the value of social safety nets, instead of channelling funds to finding sustainable solutions to important socio-economic challenges facing the country.”
Can SA achieve its SDGs by 2030?
Ade points out that in South Africa, the existing challenges of unemployment, poverty and inequality have severe social costs, which may derail the government’s focus on achieving some of the SDGs. However, SA can improve its chances by improving the levels of education and skills.
“These will help in addressing challenges of acute inequality and poverty. The current government should also continue in its intentions to strengthen selected policy interventions aimed at addressing corruption, enabling free higher education, restoring policy certainty in mining and improving competitiveness of state-owned enterprises. All these are key to improving industrial competitiveness, strengthening local demand and ultimately reducing the number of poor people by 2030.”
