South Africa has lifted its borrowing requirement for the current fiscal year by 54.2 billion rand ($3.3 billion), mainly to finance a domestic bond buyback program designed to smooth out redemptions. The National Treasury estimated total borrowing at 434.2 billion rand in the year through March 2027, according to its medium-term budget review released in Cape Town on Wednesday. That compares with 380 billion rand projected in February, but is a decline from the 551.2 billion rand raised in 2025-26.
The bond buyback program will be implemented in the current fiscal year and will help "to reduce elevated redemptions over the medium term," the Treasury said. A Treasury official told reporters that market conditions would determine which maturities and issues were targeted for repurchase. The largest share of the increase will go to domestic redemptions, the Treasury said, with cash balances being reduced by 11 billion rand to partially finance the gross borrowing requirement. Redemptions would average 250 billion rand over the medium term.
To meet foreign-currency commitments, the government will raise about $15.5 billion over the medium term, or roughly $5 billion a year, and draw down on its foreign exchange balances. South Africa has already raised $3.6 billion from multilateral development banks in the current fiscal year, of which $2 billion has been disbursed, it said.
Treasury Director-General Duncan Pieterse said concessional financing would be prioritized before the government turned to the eurobond market.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing