South Africa’s government is concerned about its ability to raise revenue in the light of an economic downturn, Finance Minister Nhlanhla Nene said on on Thursday.
Nene spoke two days after Statistics South Africa said the economy had shrunk for the first time in more than a year during the second quarter of 2015, as the key manufacturing and mining sectors contracted.
The government, which has targeted a budget deficit of 3.9 percent of GDP for the 2015/16 fiscal year, would evaluate curbs on spending in its medium term budget in October, Nene said on the sidelines of a conference.
Speaking at the same venue, Treasury Director-General Lungisa Fuzile said the department had “pencilled in” a 1 billion rand ($77 million) sovereign bond when conditions allowed, but had enough foreign currency deposits as a cushion, should it be hard to get into the market.
South Africa has sent banks a request for proposals for a potential international bond issue, but has yet to decide on the currency or the timing of any deal, two sources told Thomson Reuters’s IFR on Wednesday.