Tag: debt relief

Austerity does not need to mean suffering. Cutting public spending is urgent to address South Africa’s growing debt. Delaying cuts will only worsen debt and interest payments, making future cuts more severe. Reducing spending needn’t harm South Africans, as many wasteful expenses can be removed. In 2023, the Democratic Alliance (DA) estimated that the African National Congress (ANC)-led departments wasted around R40 billion in 2022/23 alone.

The good news stemming from the Medium Term Budget Policy statement (MTBPS) is that in 2023/24, South Africa is expected to achieve its first primary budget surplus in 15 years and this will be achieved with no new revenue enhancing measures from 2023/24 onwards. 

In a world where we face mounting financial pressure, it becomes increasingly difficult to stick to the confines of our budget and keep our spending in order. Rising interest and inflation combined with skyrocketing fuel costs have knocked the finances of South Africans, leading to a rise in debt as consumers increasingly turn to credit to make ends meet.

Address by President Cyril Ramaphosa to the Joint Sitting of Parliament on South Africa's Economic Reconstruction and Recovery Plan.

Business owners could not have known how fundamentally their lives would change only a few months ago. We now know the pandemic has wreaked havoc on cash flows, supply chains, debt repayments and the general financial standing of thousands of companies in South Africa.

It’s still early enough in the year to review your spending habits, getting your finances into shape and implementing a financial plan that will ensure you get back on track. According to the 2019 Consumer Credit Market Report carried out by the National Credit Regulator, 59% of employees are stressed about their finances with less than 15% of South Africans able to afford retirement.

Debt relief for the most vulnerable in society is crucial, but the National Credit Amendment (NCA) Act will not achieve this. The extremely high rate of over-indebtedness among South Africans is well documented. The seriousness of the situation is well reflected in the headline to an article last year in the Economist: “In South Africa, more people have loans than jobs”.