We are following the Jubilee campaign here with interest.
I gather the matter of the internal debt the government owes 'to itself' concerns accrued liabilities for pension benefits to workers? From this standpoint, pay- as-you-go seems hard to avoid, at least in partial form. A good question is what the population profile looks like, whether there are anomalies like our 'baby boom' which justify some circumspection about adoption of a PAYGO financing system.
Regarding treatment of the apartheid-era debt, I can't keep from noting one of the precursors of the populist movement in the u.s. was the "readjusters" in the South who campaigned against debts (at least some under corrupt circumstances) piled up by Reconstruction-era state governments. Obviously this gave rise to an ambiguous political legacy, though one which is usually portrayed in monochrome.
Max