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06 March 2020 | Story Valentino Ndaba | Photo Stephen Collett
Lesetja Kganyago, Governor of the South African Reserve Bank
Reserve Bank Governor, Lesetja Kganyago, presented a public lecture at the UFS on 4 March 2020.

With a 7% fiscal deficit on the Gross Domestic Product (GDP) projected by the National Treasury for the 2020/21 financial year, it would not take long to arrive at a dangerous level of debt at the rate that South Africa is borrowing. Although the South African Reserve Bank Governor, Lesetja Kganyago, does not consider a debt to GDP rate of 60% a disaster, he did express his concern regarding the country’s fiscal deficits being over 6% of the GDP.

Governor Kganyago presented a public lecture at the University of the Free State (UFS) on 4 March 2020, focusing on how we should use macro-economic policy and its role in our economic growth problem.

Unsustainable policies 
South Africa’s fiscal situation is not about tight monetary policy. According to the Governor: “Weak growth is endogenous in our fiscal problems. We cannot keep doing what we are doing and hope that growth will recover and save us. Growth is low, in large part, because of unsustainable policy.”

Avoiding an impending crisis
To address the problem, as a policymaker with more than 20 years’ experience, the Governor suggested that the recommendations made by Minister Tito Mboweni be taken into consideration. “The Minister of Finance, Tito Mboweni, is a man who says things that are true even when they are unpopular. His message is that we have to reduce spending and he is right to put this at the centre of our macro-economic debate,” said Governor Kganyago.

The state needs a radical economic turnaround strategy which is able to diminish the risk of losing market access and being forced to ask the International Monetary Fund for help. Governor Kganyago is positive that such a reformative tactic would go beyond monetary policy and ensure that the interest bill ceases to claim more of South Africa’s scarce resources. 

News Archive

New Zealand High Commissioner visits the UFS
2009-11-06

The New Zealand High Commissioner to South Africa, Namibia and Mozambique, Mr. Geoff Randal, recently visited the University of the Free State’s (UFS) Centre for Africa Studies (CAS) and presented a seminar on “New Zealand and Africa: Asymmetry writ large”.

His talk considered relations between New Zealand and Africa, exploring what looks like a massive asymmetry. He concluded that difference wais normal and not in itself a barrier to effective collaboration. In his view, diplomacy is an important tool to obtain balance by continuous adjustment and through dialogue across perceived asymmetry. Through diplomacy as the connector, facilitator and coordinator, perceptions are shaped and can small states can make a stand against the powerful. Attending the seminar were, from the left: Mr. Arthur Johnson, Manager: International Partnerships and Liaison at the UFS); Prof. Heidi Hudson, Programme Director: CAS; Mr Geoff Randal, New Zealand High Commissioner to South Africa – speaker; Ms. Kamo Dipico, Administrative Officer: CAS; Ms Steffi Cawood, Lecturer: CAS, and Ms. Siti Dipico, Research Assistant: CAS.
Photo: Mangaliso Radebe

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