P.M. BRIEFING : S. Africa to Pay Most of Debt
The government today agreed to repay a large chunk of its foreign debt, disappointing anti-apartheid campaigners who had hoped to use the debt issue to speed political reform, but heavy debt repayments will still take a toll on the country.
Under a new pact with 330 international bankers, South Africa will repay about $1.5 billion of its $20-billion short-term debt within three years. That debt was originally scheduled to be repaid next June.
But South Africa will also have to make big payments on medium- and long-term debt. Economists said this could squeeze the nation’s gold and foreign exchange reserves, which have dwindled to a level to cover only six weeks’ of imports.
“All South Africans must realize that the country faces tough times in the next four years,” Finance Minister Barend du Plessis said.
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