The marketing of government debt through primary dealers was introduced in 1998, followed by a debt consolidation programme in 2002. The funding instruments were also diversified from fixed income bonds and treasury bills to inflation-linked bonds, variable rate bonds and retail bonds. Moreover, considerable progress has been made in improving cash management through investments in interest-bearing deposits.
As a result of all these measures the government has been able to reduce its net loan debt from a peak of 48,1 per cent of gross domestic product in fiscal 1996/97 to 36,8 per cent in 2003/04. This not only contributed to lower interest payments on total public debt, but also to generally lower long-term yields in the South African capital market.