SA families trying to keep up with the Kunenes – Manuel

2011-11-03 11:17

South Africa was a nation of highly indebted families, Minister in the Presidency Trevor Manuel has said.

“Living hand-to-mouth ... is a death trap,” he told delegates at the National Consumer Forum at the Gallagher Convention Centre in Midrand, Gauteng.

“What we will earn next year is already spent.”

South African households contributed only 1.6% to the country’s gross domestic product (GDP). Savings overall contributed only 16.1%.

A 30% contribution to GPD was needed for job creation, he said.

Manuel said there were 18.84 million credit-active people in South Africa, double the number of people in formal employment.About 8.8 million of those in debt had impaired credit.

“They are in trouble,” said Manuel.

“It’s a scary number but a number that arises from circumstances.”Unbridled spending was to blame.“We’ve spent money we haven’t earned yet and we’ve spent it on goods that we don’t need.

We’re trying to keep up with the Kunenes,” Manuel said.“Why do normal checks and balances in our heads not help us save?”

He said people needed to ask themselves: “That will be very nice to own, but can I afford it?”

Manuel said the protection and rights of consumers needed to be exercised.

“We don’t provide every single citizen with protection.”However, the question should be asked whether trying to help people not get into debt was taking away their freedom as consumers.

“Maybe we looking for the wrong solution,” he said.South Africa had a low savings rate and so people borrowed money at emergency rates.“There is no cushion,” said Manuel.

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