S. Africa financial stability risks, Kenya’s housing levy

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.