The Democratic Alliance (DA) has warned that a transformation fund proposed by the African National Congress (ANC) will plunge South Africa deeper into debt. This came after the Department of Trade, Industry, and Competition (DTIC) said it may borrow between R34 billion and R50 billion from the African Export-Import Bank to capitalise the fund.

In a statement, the DA described the fund as: “[a means] to borrow billions that ordinary taxpayers will be left to pay if the Fund’s loans fail.”

According to the DA: “Any money we borrow should fund catalytic export and infrastructure projects that create jobs and competitiveness, not the ANC’s ideological schemes.” The party says it will oppose any attempts to increase government borrowing to benefit the ANC, warning that risky and unaffordable borrowing will worsen South Africa’s already precarious fiscal position.

Analysis by The Common Sense shows that South Africa’s debt-to-GDP ratio has roughly tripled since 2008, rising from around 23% to over 70% in 2025, while the budget deficit is now running at a multiple five times higher than the rate of economic growth. As the gap between revenue and expenditure has widened, fewer tax-funded resources remain to fund the ANC’s system of political patronage, causing deepening tensions within the party over access to state funds.

It is this tension that is causing policy makers to look to borrowing to fund projects such as the transformation fund, which would then distribute the proceeds to sustain the patronage networks that grease the wheels of its internal power wrangles.