South Africa’s roller coaster economy

debt
20 Oct 2023

Pitfalls and strategies for the coming months

We’re a nation known for our diverse landscapes and vibrant cultures, but we’ve been facing a series of economic challenges in recent years. As we look ahead to the coming months, it is crucial to address the pitfalls that we’ll encounter in the pursuit of economic stability and growth.

Unemployment

One of the most pressing issues is still high unemployment rates, despite recent improvements. Already a concern, the 2020 pandemic exacerbated this problem, leading to widespread job losses across various sectors. Recovery has been rocky, with any gains in one area being eclipsed by losses in another.

Strategy: As we move forward, it is essential for us to focus on job creation and skills development. Even as an individual, we must try to upskill ourselves and enter or re-enter the job market. A large chunk of our unemployed citizens are discouraged jobseekers. Thousands of whom re-entered the labour force in the last quarter, proving that it’s possible to get that job! If we can encourage more people to actively pursue employment or create their own, they can begin to earn an income.

Inequality and poverty

We continue to grapple with income inequality and poverty, which have far-reaching social and economic consequences. To address these challenges, we cannot rely on the government to uplift marginalised communities. We have to do it ourselves.

Strategy: Support our small, medium and micro enterprises (SMMEs), buy local, and promote the businesses that have a great product, but just need that exposure. There are great platforms where you can share your positive experiences and get the business some free advertising!

Fiscal deficit and public debt

The fiscal deficit and public debt are looming concerns for South Africa’s economy. Overspending and inadequate revenue collection have led to a widening budget gap, resulting in increased borrowing. Both on a national and individual level.

Strategy: Do your best to avoid borrowing money, using credit or any other form of cash advance that will require repayment. Why? Interest rates. We know it’s almost impossible to get through the month these days without at least one or two credit purchases, but here’s the thing: If you make a credit purchase of R100, you can add a minimum of R11,75 to that number when you need to pay it back (Prime lending rate at time of publication, and does not include any service or account fees payable to your service provider). If you’re late paying, that number only goes up and your debt ends up being really expensive.

If you need help to manage your debt, or if you’re not sure how much debt you have, contact us right away, and we’ll get you on the road to being debt-free.

Infrastructure challenges

Our infrastructure has faced a number of challenges in recent years, impacting our economic growth and competitiveness. Addressing these issues is crucial for attracting that much needed foreign investment and facilitating economic development.

Strategy: While we, as citizens, can only do so much, we can ensure that we do not add to the problem. Destruction of much of our infrastructure has resulted from our own angry citizens. While few can argue with the anger, we can ask that it be turned toward a more productive direction, one that does not cost us the use of our roads, public transport, sewerage and communication lines.

We have a long road ahead of us! But as South Africa’s number six most hijacked car almost said, life’s a journey, try and enjoy the ride.

With Legal&Tax, you’re not alone

Article sourced from Legal&Tax.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Mokgadi Selebalo

Mokgadi Selebalo is a qualified Debt Counsellor at Legal&Tax Services, with over five years’ experience. Mokgadi's daily duties include giving advice and assistance regarding debt review and other debt related... Read more about Mokgadi Selebalo

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