Reserve Bank Governor: You cant go abracadabra with debt

By Doug Mattushek - 26 July 2019Views : 1112

South African Reserve Bank Governor Lesetja Kganyago confirmed that it is unlikely to get involved with Eskom debt.

News24 reported that Kganyago was fielding questions at the banks annual general meeting on Friday when he was questioned about the possibility of SARB absorbing some of Eskom’s mammoth R440 billion debt.

The term ‘qualitative easing’ was mentioned, but Kganyago revealed that was not likely.

"Let me say that quantitative easing is not an option for South Africa at the moment," said Kganyago.

"You can't make debt disappear like magic. You can't do an abracadabra with debt.

"The only thing that would have changed would be ownership of that debt. Instead of Eskom owing some institutional investor or pension fund, they would now be owing the Reserve Bank. But that would be under circumstances where you have rogue governors, and I don't think you have any at the moment."

Government recently tabled a Special Appropriation Bill in Parliament to pay out R59 billion to Eskom over the next two years.