South Africa’s government won’t consider using quantitative easing to help rescue troubled state power utility Eskom, Deputy Finance Minister David Masondo has said.
“I don’t believe that something like quantitative easing will be able to help Eskom, as the situation between South Africa and other countries is totally different,” Masondo told lawmakers in Cape Town on Wednesday.
“Countries that have used quantitative easing had zero percent interest rates and that is not the situation here.”
Eskom is saddled with more than R440bn of debt and isn’t generating enough income to cover its operating costs and interest payments. The government is currently finalising details of a R230bn bailout plan to help the utility remain solvent.
The option of resorting to quantitative easing was first raised by Ace Magashule, the secretary-general of the ruling party.