South Africa's finances are overstretched and unable to weather another severe shock, a senior National Treasury official warned on Thursday.

"We are now in a position where we are dangerously overstretched in our public finances," Edgar Sishi, the acting head of the treasury's budget office, told a meeting of Parliament's standing and select committees on public finances.

Sishi said this meant that the public coffers could not support public investment, in a briefing a day after Finance Minister Tito Mboweni tabled an extraordinary adjustment budget to accommodate the realities of the coronavirus crisis.

He added though that the treasury firmly believed that by resolutely targeting a primary surplus, which it believed it could achieve in 2023/24, it could rebuild resiliency. Mboweni was aiming to stabilise spiraling debt at 87.4 percent of GDP in the same year.

His adjustment budget sounded a stark warning on debt, which was already reaching alarming levels before Covid-19 struck but has now seen the projected debt to gross domestic product (GDP) ratio for the current financial year rise from 65.6 percent to 81.8 percent.

"We consider that we can stabilise debt at 87.4 percent in 2023/24, which is the same year is when we table a primary surplus," Sishi stressed.

Director-general Dondo Mogajane confirmed that the target was part of the undertakings extended by South Africa to the International Monetary Fund (IMF) as it tries to secure a loan of US$4.2-billion from the Washington-based institution.

"It is not a condition, it is something that we as the South African government committed to."

Mboweni on Wednesday described the talks as "tough" and "difficult" but rejected suggestions from members of Parliament (MPs) that the government was accepting potentially crippling conditions from the IMF.

"The 4.2-billion is not one based on conditionalities but we have to demonstrate that we are in a position to pay back what we are borrowing," he stressed.

Mboweni said once the IMF loan was in hand, he expected that the government could secure a loan of between one and two billion US dollars from the World Bank to shore up the country's balance sheet as it negotiates the extraordinary economic circumstances.

The government expects a decision from the IMF board of directors on the loan in July. Mogajane said it would then take a couple of days for the money to flow to South Africa.

National Treasury now expects the economy to contract by 7.2 percent in 2020, the biggest shrinkage in the local economy in 90 years.

Moody's ratings agency has issued a comment cautioning that South Africa had a poor record of fiscal consolidation which, along with the dire current economic climate, bode ill for debt stabilisation within four years. 

But it stressed that the country's creditworthiness hinged on its ability to tame debt and to restore revenue intake, which is expected to be down R300-billion this year.

Mboweni said he would engage with Moody's on its comments. 

"We will have a debate with them and hear what their views are," he said.

In response to questions from members of Parliament, he was emphatic that his commitment to a debt stabilisation target had the full support of his Cabinet colleagues. 

"I said it on behalf of government and my Cabinet colleagues not on behalf of myself and my goats and chickens."