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South Africa is broke, increasing the odds of an IMF bailout

6 August 2019 8:26 PM
Tags:
IMF
The Money Show
International Monetary Fund
Bruce Whitfield
Sygnia
Magda Wierzycka
Sygnia Asset Management
IMF bailout
Sygnia Group
International Monetary Fund bailout

The Money Show's Bruce Whitfield interviews Sygnia Group CEO Magda Wierzycka and Peter Attard Montalto (Intellidex).
President Cyril Ramaphosa receiving a courtesy call from IMF managing director Christine Lagarde as part of her Africa trip on 19 December 2018. Picture: GCIS

The choice is stark yet simple. Either we prescribe our own medicine, or someone else will prescribe it for us. And it will be bitter, bitter medicine.

Sipho Pityana, President - Business Unity South Africa

South Africa’s debt burden is spiralling out of control (Eskom by itself owes R500 billion), threatening to collapse the entire economy.

Increasingly, there are suggestions South Africa may soon need an International Monetary Fund (IMF) “bailout”, a first for the country.

In return for aid; the IMF imposes painful structural reforms and demands extreme austerity.

What would an IMF bailout look like?

The Money Show’s Bruce Whitfield asked Sygnia Group CEO Magda Wierzycka and Peter Attard Montalto (Head of Capital Markets Research at Intellidex) for comment.

Listen to the interview in the audio below (and scroll down for quotes from it).

We’re not at the point yet of requiring the IMF…

Peter Attard Montalto, Head of Capital Markets Research - Intellidex

…Government is embroiled in fighting political battles…

Magda Wierzycka, CEO - Sygnia Group

The only way to bring expenditure under control is to begin retrenching people… there is no political will…

Magda Wierzycka, CEO - Sygnia Group

We keep borrowing…

Magda Wierzycka, CEO - Sygnia Group

We’re still a couple of steps away from an IMF bailout… but not many steps…

Magda Wierzycka, CEO - Sygnia Group

We should be looking at privatising. Those entities should be someone else’s liability…

Magda Wierzycka, CEO - Sygnia Group

I don’t think the introduction of prescribed assets is the worst option…

Magda Wierzycka, CEO - Sygnia Group

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6 August 2019 8:26 PM
Tags:
IMF
The Money Show
International Monetary Fund
Bruce Whitfield
Sygnia
Magda Wierzycka
Sygnia Asset Management
IMF bailout
Sygnia Group
International Monetary Fund bailout

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