‘Tackle the economic crises’

By Ina Opperman

SOS: Nation can no longer hang in there in the dark, with high interest rates – CEO

South Africans do not benefit at all from the global fall in food prices.

There are things that consumers who battle to make ends meet want to hear from the president when he delivers the State of the Nation Address tonight.

In an open letter to the president, Neil Roets, CEO of Debt Rescue, starts: “Where to from here, Mr President? When you deliver the State of the Nation Address (SONA), 60 million South Africans will be listening with the hope that you took cognisance of their plight.”

He reminds the president that in last year’s speech, he promised decisive action to address the country’s challenges. “The consensus is that government failed to reflect any real sense of urgency in the face of the country’s severe economic crises,” he says.

“Right now, millions of south Africans battle daily to simply survive a cost-of-living catastrophe the likes of which we have never seen before. Spurred on by a prolonged and unprecedented energy crises that plunges households and businesses into darkness for several hours daily, with economic growth set to slow to a standstill and jobs and livelihoods being lost at a rapid rate, people are buckling under unparalleled financial pressure.”

The scenario is grim for John and Joan Citizen. “These are the issues that need urgent attention.

“It is time to listen to the people who are in very deep trouble and have reached the end of their tether,” Roets says.

With South Africa’s unemployment rate at 32.9%, which means that one in three people are not working and have no way of putting food on the table, job creation is a priority, especially since PwC predicts that a significantly fewer number of new jobs will be created in South Africa in 2023, compared to last year. PwC expects the downward trend in the unemployment rate seen in 2022 to reverse and start pushing higher.

“We need a plan to turn this around, Mr. President,” said Roets.

The repercussions of load shedding pose a serious threat to the lives and livelihoods of people, as well as food security, at a time when over 80% of families are battling to put enough food on the table as a result of spiralling food prices, Roets adds.

According to a DebtRescue survey conducted last year, a shocking 93% of South Africans were forced to throw away food that was spoiled in refrigerators, while 38% had to replace their refrigerators due the power outages at a time when two-thirds of the population can no longer afford three square meals per day.

“Why is it that South Afrikaans have yet to feel any relief on their pockets when shopping for food, while the rest of the world has benefitted from decreases in the prices of food items, reflecting the effect of falling global prices and improved supply chains?” says Roets.

The “unwelcome and untimely announcement by the National Energy Regulator of SA of a massive 18.65% increase in electricity tariffs for the 2023/24 financial year seems like a very bad joke”.

“I understand that the rolling blackouts cost the economy R900 million per day and that small businesses are hit hardest, but what of the toll it is taking on the ordinary South African?”

Roets asks Ramaphosa to president a concrete plan for the energy crises tonight. “South Africans simply do not have the capacity to hang in there for much longer.”

He also refers to the “relentless interest rate hikes” over the past year, which had devastating consequences for indebted South Africans who are paying even more to service their home loans, vehicle loans and credit debts.

“The latest rate hike has pushed the prime lending rate to 10.75%. It has pushed up debt instalments and cost of living, in the form of food, transport and electricity, has increased. The result? More consumers are defaulting on payments and being forced into debt counselling.”

He urges the president to give answers and provide clarity. “We would like an understanding of what you plan to do about it now. We need to know that there is light at the end of the tunnel, Mr. President and in our homes.”

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