South Africa. Why pensions are in very real danger: economist
Economist Mike Schussler warns that while many believe that the worst thing for South Africa’s economy would be getting a bailout from the International Monetary Fund, there are worse fates for its citizens – like the government dipping into the country’s R1.7 trillion pension fund.
This week, the Government Employees Pension Fund (GEFP) announced that it would be ‘investing’ R5 billion in Eskom, which would help the embattled power utility cover costs to the end of the month.
Despite the injection, however, Eskom still needs to make up the remaining R20 billion it needs to keep its head above water until the end of March 2018 – on top of the R360 billion debt the group is already carrying, of which more than R200 billion is guaranteed by the government. This places the economy at extreme risk if ever recalled by lenders.
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