| The world is about to enter the second 20 years of this century.China,as an emerging participant in international governance,has an increasing influence on the international stage.The concept of a community of shared future for mankind and the Belt and Road Initiative proposed by the Chinese government has gained widespread resonance and support throughout the world.At the same time,poverty alleviation and the realization of preliminary industrialization are important development goals for most countries in Africa,and backward infrastructure has become a key bottleneck for achieving these goals.China's accumulated capital strength and its diplomatic concept of win-win cooperation coincide with the development financing needs of African countries.However,when conducting various forms of financial assistance and investment in African countries,we still need to note that many African governments are deeply stuck in the historical debt problem,and the ability to manage sovereign debt sustainability needs to be urgently improved.The African debt problem began in the 1950 s and 1970 s,when African countries borrowed money "recklessly" from Western countries and financial institutions in order to obtain development funds,while the West lent "maliciously".Since the 1970 s and 1980 s,under the multiple influences of external economic fluctuations and their own economic governance,the debt problems of African countries have continued to worsen,and debt crises have come one after another,seriously hampering their economic and social development.As we practice the Community Initiative for Human Destiny today,the continued existence of this debt problem not only poses a direct threat to the interests of creditor countries and creditor institutions,but also undermines the subsequent economic benefits of benign financial transactions within African countries themselves.This paper answers the call for this era to further apply the research results of previous scholars on the analysis of the sustainability of sovereign debt to African countries such as South Africa,to explore the development trajectory of their sovereign debt,and to judge their sustainability.Based on understanding the history of South African sovereign debt,this paper proposes a method for predicting the probability distribution of future debt using a fiscal response function.The fiscal response function is a function of the government's basic surplus over the size of sovereign debt.Following the idea of empirical analysis,this paper also includes output gaps and fiscal revenue and expenditure shocks as explanatory variables.It fits the best fiscal response function in the selected period,and finds that South Africa's fiscal policy has weak response to debt and the procyclicality of the output gap.Then fit the fitted fiscal response function as a module into the debt accumulation equation,and use the VAR model to simulate several random variables in the equation to obtain the future medium-term debt trajectory,and finally show it with a fan-shaped probability distribution chart.For the stress test,two scenarios are designed to adjust the value of the random variable,and the fan-shaped probability distribution chart is also obtained.In order to provide further reference for actual investment decisions,this article also designs a sustainable indicator for early warning of future risks..Through the analysis of the above theoretical and empirical parts,this article draws some main conclusions.The South African government's fiscal policy is weak in its ability to respond to its accumulated debt.Its sovereign debt is likely to rise in the next 7 years,and the space for upwards is greater than that for downwards.However,although South Africa 's sovereign debt is likely to rise in the future,its growth rate is relatively modest and it is unlikely that explosive growth will occur in a short period of time,which will lead to sovereign debt default and even a sovereign debt crisis.Furthermore,South Africa 's sovereign debt risk has a special risk structure.First,due to the procyclicality of its fiscal policy,reducing economic growth does not necessarily lead to a reduction in debt risk.Second,its lower external debt ratio makes it less exposed to exchange rate risk.It is not large,but if the foreign currency debt of state-owned enterprises is considered as contingent debt,the exchange rate risk of their debt will increase.Finally,this article gives some decision-making suggestions for South African sovereign debt investors.In the short to medium term,its sovereign debt is sustainable,but considering long-term investment or investing into a distant future,we need to pay more attention to whether its fiscal account's ability to respond to the debt burden has been improved.Pay close attention to whether contingent debt turns into real Debt dynamics / debt of state-owned enterprises,due to a large part of the current financial deterioration of the South African government comes from the bad operation of large state-owned enterprises and its heavy debt.In addition,it is also necessary to pay attention to the external debt ratio of state-owned enterprises,especially state-owned financial enterprises.The current depreciation trend of the exchange rate of foreign exchange rates,these corporate foreign debt repayments are likely to become a real threat to the sustainability of the South African government's debt.Pay close attention to the emerging market sovereign risk premium and rating adjustment in South Africa.If the rating continues to decline and the sovereign risk premium continues to rise,consider the superposition of interest rate and exchange rate factors,and be alert to the point at which sovereign risk rises to an unsustainable and irreversible point of time.Compare continually the sovereign debt of South Africa and similar emerging market countries.If the sustainability of its own sovereign debt is difficult to judge,the clues can be taken from other countries,so as to make a more comprehensive analysis of their debt situation.. |
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