SA's public finances are constrained and government will have to direct resources to programmes with the greatest impact on poverty alleviation, job creation and economic growth, President Cyril Ramaphosa said.
The president was addressing the National Assembly on Thursday, as part of his replies to issues raised by MPs during the State of the Nation Address debate which has taken place over the past three days.
"We are at a moment in our history where we need to make difficult choices. Our public finances are constrained, we will hear this more clearly when Finance Minister Tito Mboweni announces the budget," he said.
The finance minister will announce the National Budget on February 20.
Ramaphosa said that Eskom will need assistance from government to stabilise its finances.
"Doing so means stabilising the economy of the country," he said.
This comes at a time when public finances are constrained, so financial support must be accompanied by a "credible, far-reaching" turnaround plan by Eskom which has both an immediate and "lasting impact", he said.
The department of public enterprises told the oversight committee that Eskom's R420bn debt represents 15% of the country's debt. If it defaults, it will threaten the SA economy.
Speaking more broadly on the country's finances, Ramaphosa said that SA's capacity to borrow is extremely limited".
"It is necessary for us to prioritise and create trade-offs. We must direct resources to programmes with greatest impact on poverty alleviation, job creation and economic growth," Ramaphosa said.
He acknowledged requests from MPs to "trim the fat" and "reduce expenditure that is not essential" and cut down on "wastage and uncontrolled spending". "Simply put we need to be efficient in the use of our financial resources."
"We are determined and committed to get value for money, through better systems, improve productivity and consequences for non-performers," he said.