AN ALTERNATIVE PERSPECTIVE ON SOUTH AFRICA'S PUBLIC DEBT, 1962‐1994

The history of public debt reflects the cumulative effect of fiscal decisions and real outcomes in the economy. In the South African case the published record on public debt distorts the historical perspective on the associated fiscal decisions. This paper shows the impact of adjusting the South African public debt on an accrual basis to take account of two major obligations assumed in the first half of the 1990s, namely actuarial pension fund deficits and government debt of the apartheid homelands. The adjusted series is less volatile and rose less steeply between 1989 and 1996 than the official, cash‐based debt series. Failing to account for the evolution of these obligations exaggerates the impression of weak fiscal discipline in the early 1990s and exemplary fiscal prudence in preceding decades.