South Africa Sees $49 Billion of Debt Savings With New CPI Goal

A lower South African inflation target coupled with a revised borrowing strategy could save the government as much as 870 billion rand ($49 billion) in debt-service costs, according to a research document published by the nation’s central bank.

The working paper by authors including Christopher Loewald, the head of the South African Reserve Bank’s economic research department, builds on Governor Lesetja Kganyago’s argument last week that a reduction in the target of 3% to 6% would boost growth and lower borrowing costs. The bank and the National Treasury have been in talks about a new framework since February 2024, with discussions “ongoing,” Deputy Finance Minister David Masondo said on Monday.