Ratings agency Moody’s says it is unlikely that the South African government will reach its target to stabilise debt by 2023.

Moody’s says with the country’s ballooning debt, exacerbated by the coronavirus pandemic and the nationwide lockdown, it will be extremely difficult for government to stabilise the situation quickly.

On Wednesday, Finance Minister Tito Mboweni presented a supplementary budget that projected a wider budget deficit, while public debt was estimated to be more than three-quarters of gross domestic product in the medium term.

In the video below, Minister Tito Mboweni delivers a Supplementary Budget speech to Parliament:

The economy was in recession before the coronavirus outbreak and Treasury projects the economy will contract 7.2% in 2020.

Another bone of contention was a $4.2 billion loan the government is applying for from the IMF.

However, several lawmakers insist the loan will compromise the country’s sovereignty.

Their argument is that conditions such as structural adjustments, which normally come with IMF loans, have in the past bankrupted their recipients.

But the Treasury says the loan it seeks from the IMF, will have no such conditionality.

Treasury Director-General Dondo Mogajane says, “We should be clear, we are not going to be giving up any sovereignty, broad things that we have agreed to in the past.”

Other local and international institutions have also been approached for financial assistance.

Mboweni said the country will have to marshal all available resources in order to stimulate growth.