Due to debt, there is a transfer of capital from poor countries to rich ones, particularly in the West. This trend is likely to continue and compounds the issue of debt further. There is a need to make a distinction between the nature of debt in the South African context and that of the rest of Africa. Most of South Africa's debt is internal. Towards the dying days of Apartheid, for instance, the pension debt was turned into fully serviced debt.
Debt servicing is the second largest amount in the budget.
The government is paying money borrowed in the 1980s. This has impacted on the government's social delivery. It is important to contextualise debt and its impact whether external or internal. In a sense, every kind of debt must have its own strategy. Equity and distribution of wealth is not been given priority.