The International Monetary Fund has urged South Africa to adopt a formal fiscal rule aimed at putting government debt on a clear downward trajectory, Reuters reports. The Fund proposed reducing debt to around 70 percent of GDP over the medium term and about 60 percent in the longer term to strengthen fiscal credibility.

Delia Velculescu, IMF mission chief for South Africa, said existing spending ceilings, introduced in 2012, “helped support fiscal discipline, but it has not been sufficient to stop debt from continuing to rise over the last 15 years.” She added that a binding debt rule could also reduce the country’s borrowing costs if implemented.

South Africa has recently shown signs of economic recovery after a period of institutional weakening and governance scandals, most notably under former President Jacob Zuma. The country was removed from the Financial Action Task Force’s “grey list” for monitoring risks of illicit financial flows, and it received its first credit rating upgrade in 20 years in November.

The IMF’s recommendation highlights that, despite gradual improvements, downside risks to South Africa’s economic outlook remain, Reuters notes. Implementing a formal debt-limiting framework is seen as a step toward enhancing fiscal discipline and ensuring more sustainable public finances over time.