Abstract
IMF Country Report No. 22/38
Copyright Page
IMF Country Report No. 22/38
SOUTH AFRICA
SELECTED ISSUES
February 2022
This Selected Issues paper on South Africa was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on January 21, 2022.
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Title page
SOUTH AFRICA
SELECTED ISSUES
January21, 2022
Approved By
African Department
Prepared by Ana Lucia Coronel (mission chief, AFR), Heiko Hesse (SPR), Ken Miyajima, Alejandro Simone, and Haonan Qu (AFR). Tiana Wang and Zhangrui Wang provided research support and Hatem Alsokhebr and Cecilia Prado administrative assistance.
Contents
SOUTH AFRICA: THE FINANCIAL SECTOR-SOVEREIGN NEXUS
A. Introduction
B. Importance of Sovereign Debt for Financial Intermediaries’ Balance Sheets
C. Government Bond Holdings by Banks and Nonbank Financial Institutions in South Africa
D. Fiscal Risks’ Spillovers and Feedback Loops
E. Fiscal Cost of Banking Crises in the Literature
F. Mitigating the Financial Sector-Sovereign Nexus Risks
BOXES
1. Indicators of Rising Sovereign Risks in South Africa
2. Feedback of Bank and Sovereign Risks
FIGURE
1. Indicators of Sovereign Risk
TABLE
1. Accounting Treatment of Bank Holdings of Government Bonds
References
THE ROLE OF SOESIN SOUTH AFRICA: ISSUES AND POLICY OPTIONS
A. Introduction
B. The South African SOE Landscape
C. South Africa’s SOE Landscape vis-a-vis the International Perspective
D. International Experience with SOE Reforms
E. Policy Options
FIGURES
1. Nonfinancial SOE Portfolio by Sector
2. Nonfinancial Public Enterprise Debt
3. Fiscal Support to Major SOEs
4. Productivity: Sales per Employee
5. Cost of Labor per Operating Revenue, 2015–2020
ANNEX
I. Non-Financial State-Owned Enterprises Covered by SARB
References
HOW CAN STRUCTURAL REFORMS SUPPORT THE CLIMATE AMBITION OF SOUTH AFRICA?
A. Addressing Climate Change
B. Impact of the Pandemic
C. Advancing Structural Reforms in Support of the Climate Objectives
FIGURES
1. People Affected by Natural Disasters
2. C02 Emissions from Fuel Combustion
3. South Africa GHG Emissions
4. Adaptation Readiness
5. South Africa Government Debt
6. Employment Growth by Education
7. South Africa Employment Outlook
8. Projects under the REIPPP
9. Electricity Capacity Projection
10. Electricity Shortages in South Africa
11. Eskom Expenditure Composition
12. Projected Renewables Share and Emissions Reduction in the Power Sector
References