Index shows SA is one of world’s most indebted countries.
With major price increases for food and other essential commodities on the cards as well as a continued sluggish growth rate predicted for the new year, South Africans are in for a rough ride in 2018.
Neil Roets, CEO of debt counselling company Debt Rescue, said statistical analysis ofthe debt situation in South Africa showed consumers would notch up record levels of debt in the new year.
“It seems sad that we have to be so pessimistic at such a happy time of the year but the sooner consumers realise that the economy is in trouble and tighten their belts, the fewer of them will have to be bailed out by placing them under debt review,” Roets said.
He noted South Africans who barely made ends meet during the year plunged themselves ever deeper into debt over the holiday season by spending money on expensive holidays and generally having agoodtime- often on credit cards or with money borrowed from money lenders. Roets said experience over time had shown that January was the month of the Great Reckoning when these chickens came home to roost.
“We see more new clients seeking help with the repayment of outstanding debt in January and February than during any other month ofthe year because of additional debts that had been stacked up during the holiday season.
“Total consumer debt now stands at close to R171 trillion according to the Reserve Bank which clearly shows that South African consumers have not cut back on spending. A recent World Bank index has also shown that South Africa is one of the most indebted countries in the world.
“With unemplo yment at 27.7%, key jobs sectors including mining and the industrial sector are expected to continue shedding jobs.
Roets believed the election of Cyril Ramaphosa asthe ANC president with the likelihood that he may become the next president of the republic, there was a possibility of at least some foreign direct investment coming into the country next year.
SA Reserve Bank governor Lesetja Kganyago recently made the point although the country’s unemployment rate was already among the highest in the world, it was expected to further deteriorate in 2018. – Citizen reporter