[ Home ] [ Speeches & statements ]

After the political unrest in 1984 and 1985 that resulted in huge capital outflows, South Africa was forced to enter a partial debt standstill. Panic selling of the Rand in August 1985, resulted in the South African Reserve Bank on 28 August 1985 closing foreign exchange markets until 1 September 1985. Since then South Africa's debt situation has been governed by four successive interim arrangements. The First Interim Arrangement expired in June 1987, the Second Interim Arrangement prevailed from 1 July 1987 to 30 June 1990 and the Third Interim Arrangement held from 1 July 1990 until 31 December 1993. The final Arrangement came into effect on 1 January 1994 and ended on 15 August 2001 when all affected indebtness had been repaid.

According to a South African Reserve Bank census, South Africa's indebtness as at 31 August 1985 was $23.7 billion (41,4% of GDP) of which $13.6 billion was deemed affected falling under the Debt Standstill.

The final arrangement allowed for an initial repayment of 10% in February 1994, followed by 15 half-yearly repayments in amounts that took into account existing fixed repayment obligations. This meant that approximately 40% of the amount of outstanding debt was repaid in the first five years and the remaining 60%, during the last three years of the tenor of the final arrangement.

Government's foreign debt was also restructured and repaid under these arrangements. The final repayment of an amount of $6 885 976.25 (R56 853 512.52) was made by the National Treasury on 15 August 2001.

The final settlement of the debt standstill marks the end of an era and the elevation of the South African credit to new heights.

Contact: Brian Molefe (Deputy Director-General) at 012 315 5056

Issued by: National Treasury, 3 September 2001