The South African Reserve Bank’s Financial Stability Review out this week shone the spotlight on the risks posed by local banks’ growing holdings of government debt – risks that are only likely to build given the perilous state of the public finances. Elsewhere, the decision by Kenya’s High Court to rule a housing levy unconstitutional strikes a blow to President Ruto’s reform agenda. The question now is whether the government allows a wider budget deficit to pursue its housing policies (which the levy was meant to finance), which would raise further questions about public debt sustainability.
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