South Africa Cuts Public Wage Bill to Avoid Ratings Downgrade

South Africa’s government has announced plans to slash its public sector wage bill, setting President Cyril Ramaphosa on a collision course with the country’s powerful trade unions as he seeks to fix the biggest ever fiscal deficit in the post-apartheid era and avoid another ratings downgrade, the Financial Times reported. Tito Mboweni, Mr Ramaphosa’s finance minister, said in a budget speech on Wednesday that the state plans to cut 160bn rand ($10.5bn) from civil-servant pay in the next three years in order to halt a rapid rise in public debts between 2020 and 2021. Cutbacks to pay rises and promotion increases were part of “a major step towards fiscal sustainability”, Mr Mboweni said, as stagnant growth, falling tax revenues and repeated bailouts for state-owned enterprises threaten to sweep away South Africa’s last investment-grade credit rating. Read more