More than 25% of the workforce is unemployed
One in four South Africans over the age of 18 and under the age of 60 are currently unemployed. That means a quarter of the workforce has no source of income. These are staggering statistics. The situation is also not poised to get any better, as key jobs sectors such as mining and industry are expected to continue layoffs and retrenchments. Additionally, the uncertainty about the ANC’s land expropriation bill has dampened foreign investment interest, which is required to create jobs.
The agricultural sector is under severe pressure
The drought of 2018 is having an extended impact on the economy, as the much-reduced maize harvest drives up food costs throughout the country. Additionally, many farmers are considering a change of occupation in the face of land expropriation without compensation, leading to an even more unstable food supply chain and increased prices.
Reckless lending abounds
While most accredited financial institutions will put a consumer through a rigorous approval process before extending a line of credit, there are unscrupulous lenders out there who are only in it for the returns. According to the latest figures released by the reserve bank, South Africa's total consumer debt currently stands at R1,73-trillion. The World Bank has also recently ranked Mzansi as one of the most indebted countries in the world.
In a social climate such as ours it can seem that going into debt is normal because everyone else is doing so. Don’t feel pressured to live a life you cannot afford – live within your means, save, invest and build your wealth slowly.
These are just a few of the reasons to keep a closer eye on your household budget in 2019. Keep an eye on the blog in coming weeks and months as we share more helpful advice on making wise decisions where your finances are concerned.
In the meantime, feel free to reach out to a Libertine Consultants representative to learn more about our debt services and credit services.