
Inflation is easing, but debt is up
Although inflation is slowing, South Africans are still drowning in debt. Two-thirds of South Africa's credit-worthy consumers who took part in a Debt Rescue survey stated that they cannot repay their debt because of macroeconomic pressures beyond their control.
And DebtBusters' Debt Index for the first quarter of this year reported numbers just as bad – 91% of consumers who applied for debt counselling in the first quarter had a personal loan and 37% had a one-month loan, also known as a payday loan.
Over the past nine years, electricity tariffs have increased by 135%, the price of petrol has risen by 88% and the compound effect of inflation is 52%. As a result, consumers who applied for debt counselling in Q1 2025, on average, needed 69% of their take-home pay to service debt.
The most vulnerable consumers, taking home R5,000 or less per month, use 76% of their income to repay debt. Those earning R35,000 or more spend 77% on servicing debt. The ratios for these income groups are the highest since DebtBusters started analysing the data in 2016.
'It's clear that while consumers may feel a little more positive, personal loans, especially one-month loans, remain a lifeline for many because income has not kept pace with rising expenses,' says Benay Sager, executive head of DebtBusters.
Debt Rescue CEO Neil Roets says 41% of people have indicated that they have defaulted on their credit cards over the past year, and 30% have missed payments on retail store accounts.
'These are the two most commonly used forms of credit for day-to-day expenses because they are existing facilities that they have access to, which are now becoming increasingly unaffordable while providing the only lifeline for many consumers,' Roets notes.
The Debt Rescue survey outcomes show that 24% of those polled cited defaults on personal loans, with 31% attributing this to unexpected expenses and 21% to loss of employment. 'A total of 65% of those surveyed said that the current economic conditions are significantly affecting their ability to repay debt,' Roets said.
'These numbers reflect the reality of life right now for millions of South Africans who are unable to keep up with paying their rent, car payments, groceries and school fees, and are defaulting on all sources of debt and credit. This is not a case of overspending on luxuries, but simply a means to financially get by,' warns Roets, who has been sounding the alarm for well over a year now.
The elephant in the room is, of course, the many millions more who are not credit compliant and hanging on by a very thin thread. The latest statistics show that 25% of the population live below the food poverty line, and more than 30 million people live below the upper-bound poverty line of about R1,634 per month.
According to ISS African Futures, the percentage of South Africans living in poverty has hovered at about 62% in recent years. On the current growth trajectory, it is likely to inch down marginally to 60% over the next decade.
The number is largely the result of escalating food, energy, water and fuel costs, driven by an economy in deep trouble, which has led to the unsustainable unemployment level of 32.9% of the population.
'It is only possible to reduce unemployment with a rapidly growing economy, and the figures showing economic growth of just 0.1% in the first quarter of 2025 fail to inspire much hope,' says Roets.
'Although 27% of people polled by Debt Rescue said they are compelled to take on part-time jobs or freelance to increase their income simply to meet the monthly needs of their families and themselves, many are simply not able to extend their working hours to accommodate earning an extra income, and taking on debt becomes the only other alternative,' says Roets.
DebtBusters was able to show that compared with 2016:
Today's consumers have 53% less purchasing power. Although the impact of inflation has recently subsided, average nominal incomes of incoming cohorts are now 1% lower than 2016 levels, and cumulative inflation over the nine years is 52%. There's better news for those taking home R35,000 or more. For them, nominal income has increased by 11% since 2016.
Consumers in most income bands spend 25% of their disposable income, after debt repayments, to pay for water, electricity, rates and transport. For people in lower-income groups, who spend a larger portion of their income on food, food inflation has meant they have experienced 2% to 4% more inflation over the past few years.
Top earners have unsustainable levels of unsecured debt. On average, unsecured debt levels are 34% higher than nine years ago, but for people taking home R35,000 or more, it has increased 90% – the highest ever. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
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Daily Maverick
12 hours ago
- Daily Maverick
Israel's striking economic boom is fuelled by war and built on injustice
Here's a grim reality: if you had invested in the Israeli stock index on October 7, 2023 — the day of Hamas' deadly attack on Israel — you would now be enjoying the best financial return of any major equity market in the world. Since then, as Israel has systematically flattened Gaza in a devastating campaign that has killed tens of thousands — if not hundreds of thousands — of civilians and displaced millions, openly committing gross human rights violations in the process, the Tel Aviv Stock Exchange has soared. By July 2025 the index was up almost 80% in dollar terms, buoyed by both domestic retail investors and foreign capital. Yet this is not an anomaly — it is a feature of the system. As UN Special Rapporteur Francesca Albanese outlines in her brave report 'From Economy of Occupation to Economy of Genocide', Israel's economy is not just surviving amid conflict — it is thriving because of it. The rampage unleashed by Netanyahu's government has been good for business in Israel. The occupation of Palestinian territory is deeply interwoven with corporate interests. Illegal settlements fuel a real estate boom. Military technologies developed through decades of occupation and surveillance are exported globally. Profits are being made from the devastation of Gaza. Those same ruins now promise lucrative reconstruction contracts, once the forced removal of Palestinians is complete. Meanwhile, little appears in the mainstream financial media critical of this brutal Military/Tech/Industrial complex. Instead, commentators like Ruchir Sharma in the Financial Times marvel at its 'economic miracle', and firmly state that Israel is 'winning', while pointing out its scale of research and development spending and rate of productivity growth. On such metrics, of course, they are right. Israel ranks third for companies in the field of generative AI. Its productivity growth outpaces most other developed economies. 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Credit rating agencies Moody's, S&P and Fitch downgraded its credit rating in 2024, and all have the sovereign on negative outlooks. But there is a second, and more fundamental issue with this reading that a strong stock market and resilient economy in some way means that Israel is 'winning'. As Albanese points out, Israeli economic statistics cannot be seen independently of the violence that underpins them. The same state that supports world-leading tech innovation is also engaged in systematic and unrelenting human rights abuses, from collective punishment in Gaza to apartheid in the West Bank. The same government celebrating a record number of initial public offerings is also facing allegations of genocide at the International Court of Justice. Israel's economic success story is not despite its militaristic belligerence. It is, in many cases, because of it. These contradictions play out, on a structural level, across the country's riven political economy. 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It was a kind of diplomatic placeholder; while never realised, the illusion at least maintained hope and a semblance of legitimacy. That fantasy has evaporated. The West Bank has been Balkanised and largely annexed through settlements. Gaza has been levelled. Mass starvation has been inflicted; food and humanitarian aid have been instrumentalised as weapons of war. The dream of peaceful cohabitation has been buried beneath bulldozed homes and schools, and the growing sense that Jewish sovereignty is equivalent to Palestinian erasure. No return to the 'old' Israel Many in the international community lay the blame squarely on Benjamin Netanyahu. But like Trump in the US, Netanyahu is not the root of the problem. He is a product of the system. He reflects, rather than drives, the will of a large segment of Israeli society. His eventual departure, whenever that may be, will not reverse the current trajectory. There will be no return to the 'old' Israel that liberals nostalgically evoke. That there is widespread anger at Netanyahu in Israel is true. That those angry at Netanyahu want his successor to seek a Palestinian state, or even Palestinian rights, is false. What does the future Israel look like? How will Israel's future be affected by its genocidal actions and the inevitable demolition of its incontestable morality, derived from its birth in the ashes of the Holocaust? Israel's founding promise was born out of unimaginable trauma. For much of the international community, especially those Europeans living in the shadow of a genocide, the state was a moral necessity. But that moral obligation cannot exist alongside the permanent subjugation and expulsion of other people. Israel cannot be both a rogue Jewish supremacist oppressor and a democracy. Its political leadership and citizenry must choose which one it will be. One potentially viable future is where land is shared, in some way — either through two states, one state, or a type of confederation — and in which equal rights are guaranteed for all who live between the Jordan river and the Mediterranean. But that future is not currently on offer, and there is little pressure — either domestically or internationally — to force the issue. Absent that, Israel will drift toward a full-fledged apartheid state, increasingly authoritarian at home and in the Middle East, and increasingly isolated abroad. That the markets are still bullish, and the economy resilient, should not give us cause to reassess. History is full of states, like apartheid South Africa, that prospered economically while being corrupted morally. None endured indefinitely. DM


The Citizen
13 hours ago
- The Citizen
South Africans experiencing less financial stress, but still under pressure — survey
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Women still bear a disproportionately higher burden of financial stress, with almost three out of four female respondents reporting feeling financially stressed. Women are around 10% more stressed about finances and 20% more stressed about work life, home life and health compared to men, although stress levels for both genders decreased by 5% to 15% across all facets of life since 2024. The shift is attributed to fewer national crises, such as less load shedding, reduced inflation and people starting to manage their finances better, allowing them to look beyond short-term survival. ALSO READ: Survey shows how economic distress erodes South Africans' savings culture Even small improvements decrease financial stress The Money-Stress Tracker worked with psychologist Andrea Kellerman, who notes that even a 5% drop in financial stress (from 75% to 70% in the past year) results in people sleeping and coping 'a bit better,' suggesting the profound impact even small improvements can have on resilience and perception. However, there are still key financial concerns. For people battling with financial stress, short-term concerns continue to dominate, with the top two running out of money before the end of the month and struggling to pay off monthly debt. The impact of interest rate increases, while still significant, subsided compared to 2023 and 2024. ALSO READ: Sarb: financial stability but financial distress in households and SMEs Different age groups have different levels of financial stress The survey shows that people from different groups have more or less financial stress: Age: Middle-aged (35 – 44 years) respondents had the most financial stress. Concerns about retirement increased for respondents older than 45 compared to 2024, indicating that this age group can now look beyond the short-term concerns which traditionally dominate. Middle-aged (35 – 44 years) respondents had the most financial stress. Concerns about retirement increased for respondents older than 45 compared to 2024, indicating that this age group can now look beyond the short-term concerns which traditionally dominate. Income: Lower-income groups are the most concerned about the impact of interest rate increases or unexpected expenses. While electricity costs are an elevated concern across all income groups compared to 2024, retirement worries are more pronounced in the upper-income brackets. People earning more than R20 000 a month remain in the group that experiences the most financial stress, often qualifying for and taking on more credit than their earning capacity allows. Lower-income groups are the most concerned about the impact of interest rate increases or unexpected expenses. While electricity costs are an elevated concern across all income groups compared to 2024, retirement worries are more pronounced in the upper-income brackets. People earning more than R20 000 a month remain in the group that experiences the most financial stress, often qualifying for and taking on more credit than their earning capacity allows. Region: Respondents from the Western Cape are the most financially concerned, surpassing Gauteng, which reported the most financial stress in 2024. 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In 2022 and 2023, people tended to seek better jobs or start a side hustle, while in 2024, debt counselling was the preferred way to relieve financial stress. Now there is a growing emphasis on entrepreneurial efforts, multiple income streams and financial independence, reflecting a move towards self-reliance and creating diverse sources of income. Benay Sager, executive head of DebtBusters, says that despite the slight reduction in overall stress, over 90% of South Africans with unsustainable debt do not proactively seek professional support such as debt counselling. 'This underscores the ongoing importance of stress-management programmes, financial education and awareness campaigns that address stigma and promote early intervention. It also highlights the need for innovative solutions to deal with financial stress, particularly those that help consumers stretch their money further.' 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The absence of large-scale disruptions such as load shedding or social unrest allowed people to regain emotional bandwidth and reframe their financial situation. With just a small decline in stress, people have begun to look beyond short-term survival.'

IOL News
14 hours ago
- IOL News
Mabaso calls on Joburg residents to safeguard RDP and social housing
The City of Johannesburg's Member of the Mayoral Committee (MMC) for Human Settlements, Mlungisi Mabaso, has made a passionate appeal to residents benefiting from government-subsidised housing to protect and maintain their properties. Image: Itumeleng English / Independent Media City of Johannesburg Member of the Mayoral Committee (MMC) for Human Settlements, Mlungisi Mabaso, has lashed out at Joburg residents who are beneficiaries of Reconstruction and Development Programme (RDP) and social housing, to protect and care for their properties. Mabaso criticised South Africans who refuse to pay for government services and those who damage and disrupt infrastructure during a site handover ceremony at the Riverside View Social Housing project, located north of Johannesburg near Fourways. "We have thousands of our people who want to be accommodated. If we can't collect rent and services, we cannot build new spaces. Everyone needs to be accommodated, and I do not agree with the notion that we should only focus on the RDP social housing programme. We need various housing solutions to cater to the needs of everyone. "Some need to be fully subsidised, and some are first-time home owners who are in the GAP market. They must be accommodated. Everyone must be accommodated according to their circumstances, and those who are called on to pay for services must do so to ensure that we can provide services in the future," he stated. The GAP market consists of workers who do not qualify for a full bond. They are subsidised by the government to buy their first home. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading On the City of Joburg's decision to find alternative accommodation outside of the CBD, Mabaso said this has been a conscious decision which ensures that everyone benefits from government social housing initiatives, including those who stay far from the city centre. "What we ought to do is to account for every cent spent on implementing our project, as this is a moving target and taxpayers' money. We can't squeeze everyone in the inner city, which is why we have decided to implement these projects outside the inner city. Some do not want to reside in the inner city. There have been quite some developments outside the inner city, and all of those are performing very well," Mabaso stated. Mabaso, alongside speaker Rufus Maswazi and CoJ Speaker, Margaret Arnolds, and Johannesburg Social Housing Company (Joshco) representatives, commended the residents of Diepsloot for not plundering and destroying a range of social housing projects, which have been launched to ensure dignity to low- and middle-class income earners. Arnolds commended Joshco and its partners for ensuring dignity to those who need it the most, adding that not everyone in the city enjoys a dignified home due to the limited government funding, which is unable to deal with the human settlement challenges in real time. "It's a great honour to be here for this groundbreaking project. Human Settlement is not only about housing, but also addressing special planning that keeps our people on the periphery. We must work hard in translating policy into progress to ensure vision for housing for all is not spoken of but implemented and realised. "This is a powerful example of the city's commitment to bringing safety and dignity to our people. It is very important that we reach out and integrate our people into spaces such as this one," she said.