South Africa Pledges Wage Freeze But Sees Debt Peaking at Higher Level

The South African government pledged to freeze public sector wages for the next three years to contain a yawning budget deficit but forecast that debt would peak at a higher level in a mid-term budget unveiled on Wednesday, Reuters reported. Africa’s most industrialised economy was already in recession before the COVID-19 pandemic struck, and one of the world’s strictest lockdowns has exacerbated its woes. The wage-freeze plan raises the risk of strikes by the country’s 1.3 million civil servants and follows a pledge in February by Finance Minister Tito Mboweni to curb a rising wage bill. Addressing parliament on Wednesday, Mboweni said the country had to take action to avoid a sovereign debt crisis. “Our compass points towards fiscal sustainability and we must all face the same way,” he said. Read more