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Africa

Focus on Africa: Debt-ridden South Africans go for more to buy food

media Johannesburg in South Africa Wikimedia/CC/Evan Bench

South Africans sink into debt as thousands contract more loans to feed themselves.

These disturbing revelations are contained in a new study by Statistics South Africa. According to this official economic data agency, the gross consumer debt of individual has soured to R1.73 trillion (108 billion euros), with the average debt per person estimated at R70, 000 (4300 euros).

The Johannesburg Citizen newspaper which undertook a review of the study reports that bad debts were turning the lives of struggling families into a nightmare, with an estimated 280,000 consumers having filed for legal debt review.

Sellers in a Johannesburg street Getty Images/Richard I'Anson

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracting debt to service debt

“It is not only the poor that are taking more debt to feed themselves under the current slow sluggish economy, but the middle class as well," says Earl Coetzee, News Editor of the Johannesburg-based Citizen.

As he puts it, “they are taking debt in order to service other debt”.

Despite the existence of legislation making it difficult to access debt, Coetzee claims that some businesses are capitalizing on the historically lax credit lending industry and people’s needs to access food and basic necessities.

Government fanning debt inclination

South Africa’s statistics agency also notes in the report that the government (who piled up their own gross loan debt of R2.2 trillion/€137 billion in 2016) is also claiming its own pound of flesh by collecting up to 20 percent of workers’ monthly earnings. This comes in the form of personal income taxes and indirect taxes on almost everything a household buys, fuel levies, sin taxes, property taxes, cars and TV licenses.

According to the Citizen’s news editor, South Africans are already worried by the piling debt. “We see it every day in the national electricity utility Eskom; they are constantly asking for increases in rates. The consumer is already paying a large portion of their income just to keep their electricity on”.

Soweto Photographer: András Osvát

Constant assault

Earl Coetzee also raises the nightmare of monthly increases in fuel prices. Gas was expected to go up by 45 cents per litre on May 1.

Coetzee claims that even if a large basket of South African staples are exempt from the VAT increase, “all the other things that get your food on the table - the production, the transport - are eventually added to the price, on top of school fees, and having to buy fuel everyday”.

It’s just a constant assault, and I’m actually stumbling on my words just thinking about it”, says Coetzee.

FOCUS ON AFRICA 30 04 2019 30/04/2019 Listen

 

 

 

 

 

 

 

 
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