Debt is not a replacement for domestic revenue mobilisation, says South African Reserve Bank Governor Lesetja Kganyago. He was delivering his opening address at the African Economic Research Consortium’s 50th bi-annual plenary underway in Cape Town.
The plenary brought together more than 200 researchers, academics, policy makers and economists to discuss the rising debt levels faced by African countries and the challenges such debt poses to the growth of countries on the continent.
Kganyago says, “Public debt has as an important role to play in financing development, particularly in smoothing government expenditure, however, it should be clear that debt is not a replacement for domestic revenue mobilisation.”
“Meanwhile debt levels have to remain sustainable so as not to undermine market confidence. To ensure that debt plays a meaningful role, it must be utilised for revenue generating activities that increase the productive capacity of the economy,” adds Kganyago.
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