Lesetja Kganyago, governor of South Africas central bank, speaks at an interest rates news conference in Centurion, South Africa, on Thursday, May 30, 2024. Both the Economic Freedom Fighters and former President Jacob Zuma’s uMkhonto weSizwe Party in their manifestos said they want to nationalize mines and banks.
The parties might say that want to nationalize banks, but until that becomes government policy we will not have to respond, Governor Lesetja Kganyago told an event in Johannesburg for the release of the biannual Financial Stability Review on Wednesday.
The government’s debt to gross domestic product estimated at 74.1% for this fiscal year is already much higher than the emerging market average.
Kganyago said the government will need to consider tradeoffs.
“At the end of the day when you govern, you are going to face the reality that you only have so much resources to work with,” the governor said. “If you try to do things beyond those resources, you are going to end up having to pay for it and it’ll not take long before the funders start saying, I am not funding you anymore.”
When that happens you will be left with only one funder who will come to the party - the IMF, Kganyago said. “They know one thing when they come, they will teach you how to budget and they’ll make you to live within your resources and it’s going to be painful. And you know what? You might not have to drink the medicine. You might have to undergo surgery.”