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The Ninety One SA Recovery Fund in association with Ethos Private Equity aims to raise R10bn.
While South African government debt has ballooned in recent years, one of the silver linings was that the vast majority of what the country owes is denominated in rand.
This meant that even if the notoriously volatile local currency took a nosedive – as it did over the past two years, declining by 16% against the dollar – government’s repayments remained in rand.
But over the past 10 and 20 years, the rand has weakened by 58% and 95% respectively. This would have meant, for example, that the repayments on a 10-year loan denominated in dollar would have grown almost 60% more expensive in rand. SA was spared this, because its loans were made in rand.
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