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Scrap the odious apartheid debt!

By Linda Ensor, Business Day
29 July 1998

CAPE TOWN - Legislation to increase state debt by R936m to relieve provinces of their apartheid debt legacy was tabled in Parliament yesterday.

However, the memorandum to the Inherited Debt Relief Bill stressed that debt servicing costs for this fiscal year would not rise as a result of the debt being incorporated into the national debt portfolio.

"Provision has already been made for the additional servicing cost resulting from the national sphere of government having effectively assumed responsibility for the discharge of the inherited debts," the memorandum said.

The debts, as of March 31 1995, consisted mainly of bank overdrafts, outstanding liabilities and amounts owed certain pension funds.

The bill follows a cabinet decision last year to relieve affected provinces of their inherited debt. It would also compensate Mpumalanga and the Northern Province for the debt repayments already made.

In terms of the interim constitution, the Eastern Cape inherited debt of R597m - the bank overdraft of the former Transkei - Mpumalanga R58m, North West R189m and Northern Province R92m.

The bill stipulated that the transfer to the provinces would be subject to the terms and conditions imposed by Finance Minister Trevor Manuel.

The final inherited debt figure was determined with much difficulty because of missing accounting records and an absence of supporting documentation.