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Here’s How Government Debt Is Burdening South Africans

government debt south africa

South Africans have a had it tough over the past year. With ever-increasing petrol and food costs, consumers find their budgets getting tighter each and every month. There are many factors at play which affect the price of fuel and goods, but there is one that is becoming blatantly obvious – government debt.

Eskom And Municipal Debt Is Crippling US

The combination of Eskom’s R420 billion debt and the R 27 billion owed by municipalities paint a grim  picture of our state-owned enterprises.  Eskom has now proposed another 15% tariff hike which will once again fall on to the consumer. Just as consumers make budget cuts and drop more luxuries, they get hit again with further price increase. This is a direct result of this government debt.

This type of pressure leads to consumers using more and more debt to make it through the month. More personal loans, payday loans and credit cards get utilized as consumers spend the last of their income long before payday.

What Can Consumers Do To Keep Up?

The World Bank Index has already painted South Africa as one of the most indebted countries in the World.  Consumers need to try their best to stick to strict budgets and monitor their spending. By prioritizing on necessary expenses, consumers can work out how much is left for other costs. Instead of taking out new loans or buying on credit, consumers must aim to buy using cash.

South Africa has some fantastic debt management options available for those who find themselves over-indebted.

Chief economist at Economist.co.za, Mike Schussler reports via Business Insider.

In South Africa, the consumer is often thought to have a massive debt problem, and while consumers did struggle with debt during the peak before the National Credit Act started to operate, the fact is that, compared to developed world standards, our consumers have never had the same level of financial obligations.

Let me say this again – South Africa has a well-organised credit market and good counselling and debt management institutions, along with very good legislation.

Solutions such as consolidation loans from credit providers and debt counselling from debt counselors give the indebted hope. To see which option is best suited for you, contact Vantage Debt Management for a quick, free financial assessment.

 

{Source: Business Insider}

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