Middle Class Sinks deeper into debt to keep food on table


by Wendy Jasson Da Cosia

Middle-income South Africans are running out of money to feed their families and are getting deeper into debt just to afford everyday essentials.

Financial services company Debt Rescue said people who earn between R20 000 and R25 000 are relying on credit cards, store cards, overdrafts and loans to buy food and get them through the month.

However, not everyone had access to these facilities, and many were in huge debt or under debt review.

The organisations’ chief executive Neil Roets said in many cases people were forced to sell their houses and cars, and move in with family members, to make ends meet.

“Within five days after they get their salaries and the debit orders have come off, they have nothing left in their bank accounts,” said Roets.

He said global economic conditions, the exponential increase in the cost of living, the 38% year-on-year increase in the price of fuel, electricity price hikes and steep inflation were some of the factors that had led to the current situation.

The National Credit Regulator’s Credit Bureau Monitor, released in March, shows there were 16.21 million enquiries for credit during the first quarter of this year. Roets said it also showed the country had 26 million credit active consumers, while 10 million had impaired credit records.

Political scientist Sandile Mnguni, who is currently researching food security, confirmed that: “We might have food, we might have stockpiles of food, but affordability will be the issue.“

He said less money also meant that many didn’t have a choice when it came to what they ate.

“Over the years we have seen people going for fast foods rather than spending more on food that is nutritious. As much as everyone would like to consume healthy food or a balanced diet, the issue of affordability prevents them from doing so,” said Mnguni.

He said healthy food was expensive and unaffordable, while it was cheaper to buy fast food that was filling but not nourishing. Mnguni said most people did not live in spaces where they could grow their own food.

Mnguni said the government should consider adding chicken and baby formula to its list of VAT exempt goods, and protect local industries to bring down the price of food.

The Pietermaritzburg Economic Justice and Dignity group said a basket of food for a family of seven amounted to R4 750, much higher than what most people could afford.

Spokesperson Mervyn Abrahams said typically food was not top of the list when South Africans budgeted.

He said transport money to get to work came first, then electricity for heating and security, paying debt and lastly food.

”Incomes are so low that South Africans have to live off debt, ” he said.

Like

Like
Love
Haha
Wow
Sad
Angry



Source link